Shares of embattled Bradford-based subprime lender Provident Financial rose about 7% on Tuesday as it strengthened its board with the appointment of Patrick Snowball as chairman and three new non-executive directors.
Provident Financial also announced results for the six months ended June 30, 2018, which showed adjusted profit before tax fell 24% to £74.9 million.
In August 2017, Provident Financial shares plummeted more than 70% after it issued a second profit warning in roughly two months and said then CEO Peter Crook would leave the company and its dividend would be suspended.
Provident Financial had suffered major problems with its move from using self-employed agents to directly employed debt collection agents called CEMs or “customer experience managers.”
But on Tuesday, the firms shares rose as it announced Snowball will join the board as chairman on September 21, 2018, and Stuart Sinclair, interim chairman, will retire.
“Patrick is an experienced chairman, non-executive director and chief executive officer, following a distinguished career in the insurance and retail banking,” said Provident Financial.
“He was CEO of Suncorp Group Limited, an ASX20 Australian financial services group from 2009 until 2015, where he successfully turned round the group following the global financial crisis.
“Prior to that, he was a director at Aviva plc from 2001 till 2007, and as CEO he played a key role in merging and consolidating Norwich Union, Commercial Union General Accident and London and Edinburgh into Aviva General Insurance …”
Provident Financial also announced the appointments of Angela Knight, Elizabeth Chambers and Paul Hewitt as independent non-executive directors with effect from July 31, 2018.
“Angela is a former government minister, CEO, chair and non-executive director,” said Provident Financial.
“She is currently the chair of the Office of Tax Simplification, and has been Economic Secretary to HM Treasury, chief executive of the British Bankers Association and Energy UK …
“Elizabeth G. (Libby) Chambers will chair the new board committee focused on customer, culture & ethics.
“The committee will drive forward changes in behaviours, practices and attitudes across the group, and is expected to be formed in 2018.
“Libby is an experienced senior financial services executive, strategist and marketing leader in the UK and globally.
“She serves on the board of Smith & Williamson, the wealth manager and professional services firm, and is on the advisory boards of several fintech and software start-ups, including Datami, Loyalty Angels (Bink) and Digi.me.
“Her previous roles include serving as Chief Strategy, Product and Marketing Officer at Western Union, Chief Marketing Officer of Barclays Global Retail & Commercial Banking and Barclaycard, and leading Barclaycard’s co-branded card issuing business in the UK …
“Paul Hewitt will become chair of the audit committee, taking over from Andrea Blance, who will remain on the committee.
“Paul is an experienced chief financial officer (CFO), chairman and non-executive director.
“He was the deputy chief executive and CFO of Co-operative Group, and has chaired audit committees for Tokio Marine, Kiln, NEST Corporation, Tesco Bank, Collins Stewart Hawkpoint, Co-operative Banking Group and GMT Global Aviation …”
Provident Financial is a leading provider of credit products to consumers not served by mainstream lenders.
The group serves 2.5 million customers and its operations consist of Vanquis Bank and its consumer credit division (CCD) comprising Provident and Satsuma and Moneybarn.
On Tuesday, Provident Financial CEO Malcolm Le May said: “I am pleased to report good progress against the 2018 goals we set out at results back in February.
“The implementation of the home credit operational recovery plan is going well, we have commenced our ROP refund programme after a successful pilot, and we remain engaged in constructive dialogue with the FCA on their investigation at Moneybarn.
“I am confident we are well placed to make good progress on all three goals during the second half of the year and within the provisions we made in 2017.
“Today we have also significantly strengthened the board, another key objective, with the appointment of Patrick Snowball as chairman, and three new non-executive directors.
“These appointments will add to the board’s financial services, consumer finance, regulatory and non-executive director skill set.
“Operationally we have made good progress.
“Collections performance in home credit in the second quarter did not show the improvement we expected mainly due to lower collections from customers who were live during the poorly executed migration to the new operating model last summer.
“However, customers who took credit from us since then are performing in line with historic levels, indicating to me the changes we are making to our model are working.
“Vanquis Bank continues to perform well and in line with our expectations and has made the necessary changes required to meet the new regulatory requirements introduced by the FCA’s new rules addressing persistent debt.
“Moneybarn has delivered strong growth and continues to perform in line with our expectations.
“I believe the group is well placed to champion the underserved, and through greater collaboration across our businesses we can provide them with the credit they need, when they need it, and on responsible terms.
“I look forward to continuing the journey of repositioning the group as the leading provider of credit to this underserved sector, and would like to thank all my colleagues for their hard work over the last six months.”