Shares of troubled sub-prime lender Provident Financial Group rebounded 20% on Friday after it announced it re-hired former executive Chris Gillespie as managing director of its home credit business and made other management changes.
Provident has had major problems with its move from using self-employed agents to directly employed debt collection agents called “customer experience managers.”
Bradford-based Provident’s shares had plummeted about 70% on Tuesday — wiping £2 billion off its stock market value — after it issued a second profit warning in two months and said CEO Peter Crook would leave the firm and that its dividend would be suspended.
Provident also said on Tuesday the UK’s Financial Conduct Authority (FCA) launched an investigation into its Vanquis Bank business.
On Friday, Provident’s executive chair Manjit Wolstenholme announced big changes to the company’s Consumer Credit Division (CCD) management structure.
She said Gillespie has been appointed managing director of the Provident home credit business, replacing Andy Parkinson with immediate effect.
Gillespie previously worked for Provident Financial Group but stepped down from his role as managing director of CCD in 2013 to pursue career opportunities elsewhere.
“Chris Gillespie’s focus as the new managing director will be on re-establishing relationships with customers, bringing collections back to a normal level, and stabilising the operation of the business,” said Provident.
“Chris Gillespie will be supported by expertise from across the group.
“Luke Enock, who will continue his role leading Satsuma and the analytics agenda for CCD, will now also take on the role of deputy managing director of the home credit business.
“He will be joined by Greg Cant, director of corporate finance and development at PFG, to provide further project management expertise.”
Wolstenholme said: “My review of the business is ongoing as we move towards stabilising the Provident home credit business and improving the service to our customers.
“These are my first appointments and I intend to work closely with the new team on turning the home credit business around and to putting a plan in place to deliver good results for the company.”
Liberum analysts Portia Patel told Reuters: “While some may take comfort from the reinstatement of the previous CCD director, we note that the business has now moved in a very different direction under the new model and the scope for reversing or even partially reversing the operational changes is limited.
“We are not surprised to see further management departures following the CEO stepping down, and we would not be surprised to see more, including in Vanquis.”