Jessica Fino 6 Dec 2017 11:44am

FCA investigates Provident’s Moneybarn division

The Financial Conduct Authority (FCA) has launched an investigation into Provident Financial Group’s car finance division Moneybarn

Shares at Provident fell as much as 10% on Wednesday after it was revealed that Moneybarn is being investigated over how it processes its customers’ affordability for car loans and its treatment of those in financial difficulties.

The FCA granted Moneybarn authorisation to conduct consumer credit activities in June last year and has since continued to discuss the firm’s processes with it. Moneybarn later announced that it had made a number of improvements, including to the way it deals with future loan terminations.

Provident said in a statement that it would “work collaboratively with the FCA to investigate the remaining concerns and resolve any outstanding related issues as soon as practicable”.

The FCA declined to comment on the investigation.

In October, Provident announced that it expected to incur a loss of between £80m and £120m for 2017 in its consumer credit division and confirmed it would not be paying a full-year dividend.

Earlier this year, the company lost its chief executive Peter Crook, who resigned following a period of “under-performance” and, more recently, its executive chairman Manjit Wolstenholme died unexpectedly at the age of 53.

Wolstenholme, an ICAEW chartered accountant, had only been appointed chairman in August. The Provident board appointed its senior independent director, Malcolm Le May, a fellow ICAEW member and former co-head of banking for Barclays in New York, as interim chairman in her stead.