Provident Financial appoints new boss to home credit arm
Troubled doorstep lender Provident Financial has made a management change at its consumer credit division.
The firm lost two-thirds of its share value on Tuesday after it issued its second profit warning in three months.
Chris Gillespie has been appointed managing director of the home credit business, replacing Andy Parkinson.
His task is to re-establish relationships with customers, bring collections back to a normal level and stabilise the operation of the company.
The FTSE 100 company expects to make losses of £80m to £120m after its debt collection rates fell to 57%, compared with a 90% rate in 2016.
Bradford-based Provident recently changed the way it collected its loans, replacing self-employed agents with “customer experience managers”.
Chief executive Peter Crook resigned earlier this week.
Manjit Wolstenholme, Provident Financial executive chair, said she was seeking to “turn the home credit business around and to putting a plan in place to deliver good results for the company”.
Also joining the firm’s home credit business are Luke Enock, who currently works for Provident subsidiary Satsuma, and Greg Cant, also currently employed at Provident.
The company has some 2.5 million customers, many of whom would not qualify for a standard bank loan and are therefore categorised as “sub-prime”.
Provident had first flagged up problems in June.
At the time, it said not enough of its self-employed debt collectors had applied to become employed by the company.
It had also been less effective at collecting money and selling new loans, while a greater number of agents than normal had left.
The company said then it expected profits to be £60m at its consumer credit division.
Its other divisions – Vanquis Bank, sub-prime car loan business Moneybarn and consumer credit brand Satsuma – are trading in line with expectations.
However, Vanquis has been under investigation by watchdog the Financial Conduct Authority, which had concerns about one of its products.
Provident agreed to suspend all sales and is awaiting the outcome of that inquiry.