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Shares in Provident Financial (PFG) have tumbled after the troubled lender announced the Financial Conduct Authority (FCA) had launched a second investigation into its business.
The stock fell to the bottom of the FTSE 250, down 13.6% at 760p, after the company announced the FCA had launched an investigation into Moneybarn, its car and van financing arm.
That follows August's revelation that the FCA was probing the repayment option plan product sold by the lender's Vanquis bank, news that, coupled with a profit warning on its home credit division and the scrapping of its dividend, saw the shares plunge 70% in a single day.
Invesco Perpetual and Woodford Investment Management own more than 40% of the company's shares between them.
Provident Financial said the FCA investigation related to 'the processes applied to customer affordability assessments for vehicle finance and the treatment of customers in financial difficulties'.
Shore Capital analyst Gary Greenwood downgraded the stock to 'hold', from 'buy', on the news.
'For some companies, it never rains but pours and this seems to be the case for Provident at present,' he said.
Greenwood pointed to the FCA investigations into Moneybarn and the repayment option plan, the badly handled restructuring of its home credit division and vacancies in its senior management team following the resignation of chief executive Peter Crook and the death of executive chairman Manjit Wolstenholme.
'There is now simply too much uncertainty to justify us maintaining a positive stance on the shares,' he said.
Liberum analyst Portia Patel said the news reinforced her 'sell' stance on the shares.
'While Moneybarn is only a small part of Provident's business and therefore not critical to the overall financial health of the group, today's news does add credence to our view that we are right to be concerned about underwriting standards across the business, particularly at Vanquis,' she said.
'We previously flagged our concern that Moneybarn has been lending aggressively at the top of the cycle which has been evident in rapidly rising impairment rates within the business,' she added.
'Separately, the FCA continues to investigate Vanquis's repayment option plan product and we see no evidence as yet to change our view that the home credit business has been permanently damaged. We remain convinced that the balance sheet needs strengthening and that is before accounting for a yet unquantifiable potential liability for the repayment option plan.'