Return of former credit boss helps Provident shares bounce back

SHARES in troubled doorstep lender Provident Financial jumped by 22pc yesterday after the FTSE 100 company announced a shake-up in management and the return of the former head of its consumer credit arm.

Chris Gillespie, who ran the business from 2007 to 2013, has been brought back into the fold as the company desperately seeks stability. Its shares tumbled 66pc earlier this week, wiping £1.7bn off its market value, as it issued its second profit warning in three months, scrapped its dividend and revealed the shock departure of Peter Crook, its chief executive.

The fourth blow of what analysts described as a “quadruple whammy” came as the company also revealed that the Financial Conduct Authority has been investigating one of its Vanquis Bank products. At the heart of the profit warning was the revelation that its debt collection rate had tumbled to 57pc from 90pc a year ago after it changed the way it collected loans.

Provident said Mr Gillespie, who will be managing director of the home credit business, has been tasked with “re-establishing relationships with customers, bringing collections back to a normal level, and stabilising the operation of the business”. Since stepping away from the company in 2013, Mr Gillespie has served as chief executive at Albemarle & Bond, the pawnbroker, as well as Amigo Loans and 118118 Money, the loan companies

Luke Enock, who works for Satsuma, a Provident subsidiary, and Greg Cant, director of corporate finance and development, will join Mr Gillespie in the division. Manjit Wolstenholme, executive chairman, said: “My review of the business is ongoing as we move towards stabilising the Provident home credit business and improving the service to our customers.

“These are my first appointments and I intend to work closely with the new team on turning the home credit business around and to putting a plan in place to deliver good results.” The swift recruitment of Mr Gillespie was hailed as “decisive” action by analysts. Gary Greenwood, of Shore Capital, said: “To have found an experienced industry executive who was willing to take on the role so quickly is a small, positive surprise after the week’s earlier disappointments.”

The shares rose 168p to 916p yesterday, although they are still down 48pc since the profit warning.