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Provident Financial shares dip on reports of new departure, potential cash call

Shares in Provident Financial Plc fell Feb. 26 after reports of another executive leaving and a potential cash call ahead of the publication of the British subprime lender's full-year 2017 results.

The Times reported the same day that Phillip McLelland, the finance head of its consumer credit division, had left the company.

Ele Thornhill, head of online financial strategy at Provident Financial's Satsuma Loans business, had replaced McLelland with immediate effect, the report noted, citing an internal memo written by Chris Gillespie, the head of the consumer credit division.

McLelland's exit is the latest in a series of departures that followed the failed and costly restructuring of the company's home credit business.

Meanwhile, The Daily Telegraph reported Feb. 24 that Provident Financial has been testing investor sentiment regarding a potential cash call of up to £500 million to help repair its balance sheet. Investment bankers at Barclays and ­Cazenove have led discussions with investors and are likely to act as chief underwriters on the transaction if it goes ahead, according to the report.

The company's shares fell 9.23% to 5.96 pence at 12:49 p.m. in London on Feb. 26.

The firm said in January that it expects to report a pre-exceptional loss of about £120 million at its consumer credit division for the full year 2017 due to problems at its home credit business. Earlier in February, the company said it continues to be in talks with the U.K. Financial Conduct Authority over the latter's investigations into the lending practices of units Vanquis Bank Ltd. and Moneybarn.

Provident Financial is set to publish its annual results Feb. 27.