February 2, 2018 / 7:42 AM / 8 months ago

UPDATE 2-UK lender Provident Financial appoints acting chairman as CEO

* Appoints acting chairman Malcolm Le ‎May as its CEO

* Le ‎May fills a position vacant since August

* Says home credit arm makes “good operational progress”

* Shares jump 4.5 pct (Adds details, analyst comments, share movement)

By Noor Zainab Hussain

Feb 2 (Reuters) - Troubled Provident Financial has appointed acting chairman Malcolm Le ‎May as its CEO with immediate effect, it said on Friday, giving him the challenge of reviving its door-to-door lending operations.

Le ‎May, appointed to Provident’s board in 2014, fills a position that has been vacant since August when a second profit warning in quick succession prompted the departure of CEO Peter Crook and suspension of its dividend.

The British sub-prime lender has been trying to reorganise a business that has traditionally relied on self-employed agents offering high-interest loans of between 100 and 1,000 pounds and collecting repayment through weekly household visits.

But it had been unable to recruit enough people for its plan to replace external agents with direct employees.

The company, which was founded in 1880 and provided loans through the Wall Street crash of 1929 and both world wars, also faces investigations by Britain’s financial watchdog into two of its businesses.

Provident, which is worth about 988 million pounds, lost almost 70 percent of its value last year. Its shares were trading 4.5 percent higher at 700 pence at 0911 GMT, the second biggest gainers on the FTSE Midcap index.

“We were expecting and hoping to see an external appointment, to bring a fresh perspective and recovery strategy. That said, this news is likely to lead a relief rally,” Liberum analyst Justin Bates, who rates provident as “sell”, said.

Le May said that his key objective was to turn around the group.

He has previously worked at Barclays and UBS and took over as Provident’s acting chair after the sudden death in November of former investment banker Manjit Wolstenholme.

The company said its home credit arm “continued to make good operational progress” and that talks continue with the Financial Conduct Authority relating to investigations of its Vanquis Bank and Moneybarn businesses.

“The statement says nothing to suggest that a cash call will not be necessary and, anecdotally, we hear that attrition trends are challenging,” Goodbody analyst John Cronin said.

“We do not believe that today’s positive news is sufficiently strong to drive a substantial unwind of short positions and investors have good reason to remain cautious.”

Fourteen hedge funds were still betting on Provident’s share price to fall further as of Thursday, according to disclosures with the British regulator. ($1 = 0.7014 pounds)

Reporting by Noor Zainab Hussain in Bengaluru and additional reporting by Maiya Keidan in London; Editing by David Goodman/Keith Weir

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