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Shares in UK's Provident Financial crash after profit warning

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Shares in UK's Provident Financial crash after profit warning

Shares in British specialty lender Provident Financial PLC fell nearly 20% in Jan. 15 trading after the company warned that it expects its profit for 2018 to be toward the lower end of the range of market expectations.

Provident blamed the profit warning on modestly higher impairments than expected at unit Vanquis Bank Ltd., according to a Jan. 15 trading update. It cited a mean consensus forecast, based on 12 analysts, for 2018 group profit before tax, amortization of acquisition intangibles and exceptional items of £159 million, with the forecast range between £151 million and £166 million.

Provident also said its Moneybarn Group Ltd. unit continues to assist the U.K. Financial Conduct Authority's investigation into affordability, forbearance and termination options and is working to conclude the matter in the first half. The regulator opened a probe into Moneybarn in December 2017 in relation to the processes it applied to customer affordability assessments for vehicle finance and its treatment of customers in financial difficulties.

Shares in Provident finished down 19.47% at 521 pence apiece.