Moneybarn is now under investigation just four months since the FCA began its probe into Vanquis Bank.
Companies: Vanquis Banking Group PLC
Shares in Provident Financial (LON: PFG) have taken yet another hit this morning after the Group announced its subsidiary Moneybarn was under investigation by the Financial Conduct Authority (FCA).
The car loans company is being scrutinised over the processes it applies to customer affordability assessments for finance and the treatment of customers in financial trouble.
The update stated:
"The FCA granted Moneybarn authorisation to conduct consumer credit activities on 3 June 2016 and since that date the FCA has continued to discuss certain processes with Moneybarn and Moneybarn has made a number of process improvements, including to the way it deals with future loan terminations."
The announcement comes just four months after the sub-prime lender announced another of its subsidiaries, Vanquis Bank, was also being investigated by the FCA for the way it handles its repayment option plan.
News of the probe follows a string of bad news from the Bradford-based Group after issuing several profit warnings causing shares to collapse, the resignation of its CEO in August and the unfortunate news Executive Chairman Manjit Wolstenholme had passed away last month.
Image: Google
The stock had tumbled 15% to 742p at the time of writing, a 340% price drop since May's 3,265p share price. Consensus forecasts the Group to see relatively flat Revenue growth for FY17 whilst Net Profits are expected to drop to c. £105m compared to the £263m reported in FY16.
