Analysts expect losses to continue at Provident Financial Plc after the troubled subprime lender on Aug. 22 announced a "quadruple whammy" of a profit warning, the departure of CEO Peter Crook, a regulatory probe and a canceled dividend.

The FTSE 100 company said a new business model for its home credit division, which saw self-employed debt collectors replaced by a smaller number of full-time staff and greater use of technology, had led to the rate of debt recovery falling to just 57%, compared with 90% in 2016. The home credit division lends to those who might not otherwise be able to borrow due to a poor credit history, and sends debt collectors in person to recoup loans.

A "thorough and rapid review" of the home credit business is now underway, Provident said, while also announcing that the U.K. Financial Conduct Authority is probing the Repayment Option Plan product offered by its Vanquis business, which allows borrowers to freeze credit card debt for up to 24 months in adverse circumstances. The ROP product, which has now been suspended, contributes gross revenues before costs and impairments, of around £70 million per year.

CEO Peter Crook resigned, with Manjit Wolstenholme stepping in to become executive chairman, and the company canceled an interim dividend announced in July and said it would "in all likelihood" not pay one at year-end. Shares fell 66% in Aug. 22 trading to 589.5 pence per share, having closed as high as 3,265 pence apiece as recently as mid-May.

"We expect ongoing substantial losses in the share price, and would not be buyers at any price," Peter Lenardos, an equity research analyst at RBC, said in an Aug. 22 note. The shares are "not investible" until there is greater clarity from the company, which cannot be expected until 2018 at the earliest, the note said, describing Provident as a "soon-to-be ex FTSE 100 company."

Provident issued a profit warning in June in which it said the overhaul of debt collection staff in the home credit division would weigh on earnings in 2017. The lender now expects pre-exceptional losses in the range of £80 million and £120 million, compared to an earlier expectation of a roughly £60 million profit.

Lenardos also said Provident's exposure to the Repayment Option Plan matter is "difficult to quantify, and the FCA could mandate the repayment of all premiums." He said book value, which was 446 pence per share as of June 30, "remains the only relevant metric" by which to evaluate the company.

Numis analysts said in a note cited by The Guardian that ROP had been Provident's "version of PPI," or payment protection insurance, the mis-selling of which has triggered tens of billions of pounds worth of losses for banks. Should Provident "have to repay all of the premiums as the banks have done it could question the viability of the group," Numis said.

Justin Bates, an equity research analyst at Liberum, said in an email that Liberum had been sellers of Provident shares "for some time" and that he felt vindicated by the latest update. Liberum finds nothing to change its view that problems in the home credit division will continue, equity research analyst Portia Patel wrote in an Aug. 22 note.

But despite the hammering on the stock market, Neil Woodford, head of investment at Woodford Investment Management, one of Provident's largest shareholders, said he still believed that the business could recover.

"I am hugely disappointed by what has happened to the consumer credit division but I continue to believe that it will, ultimately get back on track," he said in an emailed statement. "This business has been around for more than a century and I believe it will be around for many decades to come. Assuming some stabilization in the consumer credit division with a smaller customer base, along with other conservatively struck assumptions about the rest of the business, the group should deliver pretax profit in excess of £300 million in 2019."

Woodford Investment Management had a 19.90% stake in the company as of July 27. Invesco Ltd., where Woodford worked before launching his own firm, had a 20.17% stake as of the same date.