Most of the statement focused on measures to reverse the decline on the home credit side, where a botched shift from self-employed agents to employees has seen sales plummet.
Some 300 agents are now set to be re-employed, while regional and Senior management are being strengthened.
The group confirmed the loss at home credit this year will be between £80-120mln, while there was also confirmation that the group dividend has been axed.
ROP like PPI
Laith Khalaf, Senior Analyst, at Hargreaves Lansdown said: “Provident still doesn’t have a CEO, and the financial watchdog is investigating sales of its Repayment Option Plan to Vanquis Bank customers, a product which looks a lot like PPI.
“Meanwhile the group’s credit rating is teetering on the edge of being downgraded to junk, a step down which would limit the availability of creditors, and push up the price of borrowing.”
Numis, a seller, is also worried about Vanquis.
“We believe the focus should be on the tightening of credit standards in Vanquis and Moneybarn, which suggest to us that our concerns around underwriting quality and net loan book growth are not misplaced.
The statement shows the first sign of admission from Provident that it is concerned about rising impairments, Numis said, adding that it believes the balance sheet will need strengthening even before any Vanquis payment.
Satsuma also disappoints
Neil Wilson, senior market analyst, at ETX Capital added that because of the Vanquis uncertainty it is hard to assess what a fair price for the shares might be.
The statement contained no fresh guidance on resolution or the scale of any potential fine for Vanquis.
“If the FCA goes full PPI on Vanquis, it has a serious problem, while Satsuma, which had been doing well, is performing below expectations.”
On home credit, Wilson adds: Getting the customer service and management structure right, as well as sorting the tech glitches, will help it to recover some lost ground, but it's hard to see it ever getting back to where it was.”
Shares rose 15% to 910p.