Provident Facing Demotion from FTSE 100

Provident financial is facing demotion from the FTSE 100 after the company issued a warning regarding impending heavy losses, which resulted in a significant fall in its share price. Shares in the doorstep lender fell by 66 percent - one of the worst one day falls in the history of the index - last Tuesday, after the company warned investors that it expected to post losses of up to £120 million.

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shareprices.com - Tuesday, August 29, 2017

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The last week has been a difficult time for the lender. Chief executive Peter Crook resigned following the profit warning, and the news that the FCA is investigating some products sold by Vanquis, the lender’s banking arm.

Shares have made a modest recovery, but it is unlikely to be enough to save the company from being relegated to the mid-caps following the review of the markets after the close of trading today. It is likely that the lender will be replaced by UAE-based healthcare company NMC health. The FTSE Russel EMEA Committee will be confirming the reshuffle after looking at share prices after the close of trading today.

Manjit Wolstenholme, the replacement for Mr Crook, immediately performed a management review and removed Andy Parkingson from the managing director position, replacing him with Chris Gillespie, whose role is going to be establishing relationships with customers, stabilising the business’ operations, and improving collections. Gillespie served as managing director of the consumer credit division at Provident until 2013, when he resigned, but has now been welcomed back as a part of a turnaround plan.

 

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