Lender Provident Financial has issued a trading statement announcing the resignation of its chief executive as it issues a profit warning.
Chief executive Peter Crook has stepped down and Manjit Wolstenholme has been appointed executive chairman.
The sub-prime doorstep lender is expecting losses of between £80m and £120m. The trading update says debt collection rates have dropped to 57 per cent from 90 per cent in 2016 and sales are £9m lower per week than in the same period last year.
In July the business brought in a new way of collecting loans by employing full-time “customer experience managers” rather than using self-employed workers.
However, the statement says: “The impact of higher than expected agent attrition and reduced agent effectiveness on collections performance and sales resulted in the announcement on 20 June 2017 that forecast pre-exceptional profits from [consumer credit division] would be reduced to around £60m.”
Provident is now reviewing the home credit business.
The statement also detailed an investigation by the FCA into sales of subsidiary Vanquis Bank’s repayment option plan product. Vanquis and the regulator entered into a voluntary agreement to suspend sales of the product in April 2016.
Provident will now not pay an interim dividend and says a full-year dividend is unlikely.
Wolstenholme says: “I am very disappointed to have to announce the rapid deterioration in the outlook for the home credit business. Protecting the group’s capital base through withdrawing the interim dividend and in all likelihood the full-year dividend is the appropriate response to maintain the highly valuable franchises of Vanquis Bank, Moneybarn and Satsuma. My immediate priority is to lead the turnaround of the home credit business.”