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Sub-prime lender Provident Financial in crisis


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HOLA441
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Just now, TheCountOfNowhere said:

"Putting the company's operations in context, Provident serves 2.4 million British customers, many of them unemployed or on
welfare."

 

Unemployed people on welfare shouldnt be borrowing.  REGULATE THE F**KING BANKS.

Unemployed people will borrow and they will be booked as an asset on the balance sheet. And most will go delinquent and sink the revenue and solvency of the company that goes there.

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23 minutes ago, Errol said:

Zerohedge has the story now:

That was a good summary, can't see the Bloomberg article it's based on yet but I did notice this:

Quote

Subprime Lender Self-Disrupts

Lending money to poor people is shockingly profitable. Yet the temptation to wring even more money out of doorstep lending led Provident Financial Plc to revamp its business in the name of technology and efficiency.

The result: a wrecked share price, the CEO's exit, regulatory scrutiny and a balance sheet that may need propping up. The blessing in disguise may be a slowdown in subprime lending.

https://www.bloomberg.com/gadfly/articles/2017-08-22/provident-financial-self-disruption-has-a-subprime-silver-lining

Found it now: https://www.bloomberg.com/news/articles/2017-08-22/provident-financial-ceo-steps-down-on-loss-dividend-scrapped

Edited by darkmarket
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44 minutes ago, TheCountOfNowhere said:

It's going up now...The Boe's plunge protection team's lunch must have been cancelled.

Up from a low of 426 to 555 in half an hour or so. Yep, I'd say you're right. The market manipulation and interventions are just so blatant and depressing.

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Just now, dpg50000 said:

Up from a low of 426 to 555 in half an hour or so. Yep, I'd say you're right. The market manipulation and interventions are just so blatant and depressing.

why do you think its market manipulation and intervention? markets don't move in straight lines!

 

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26 minutes ago, leonardratso said:

image.png.cb7bd98e0c75d6de09ded775caa1925a.png

The AA is another Woodford holding.£2.7 billion of debt.He was probably the best investor for this last cycle as he saw 5% dividends from companies that could increase at 4% a year would make for fantastic returns in a long disinflation.The point now though is he seems to of structured the portfolio for the UK to see very decent growth (buying lots of house builders and property companies) and ignores very high debts on balance sheets.Great investor,but im not sure if he isnt blind to the macro signals here.

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30 minutes ago, leonardratso said:

zh comments;

image.png.d4406f21ca557d408f4e8a41730958ea.png

Last comment...........

13 minutes ago, TheCountOfNowhere said:

They get their cash the honest sustainable way...from the BoE.

Priceless............

4 minutes ago, dpg50000 said:

Up from a low of 426 to 555 in half an hour or so. Yep, I'd say you're right. The market manipulation and interventions are just so blatant and depressing.

I would say shorts covering but they're probably in the pub already.

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6 minutes ago, durhamborn said:

The AA is another Woodford holding.£2.7 billion of debt.He was probably the best investor for this last cycle as he saw 5% dividends from companies that could increase at 4% a year would make for fantastic returns in a long disinflation.The point now though is he seems to of structured the portfolio for the UK to see very decent growth (buying lots of house builders and property companies) and ignores very high debts on balance sheets.Great investor,but im not sure if he isnt blind to the macro signals here.

well, everyones allowed their balls ups, i see a while back terry smith (fundsmith) sold dominos pizza to buy idexx laboratories because he though dominoes was topped out. idexx still did well, but dominoes plateau'd for a while and took off again - so he made a hash there as well, proves nobody is infallible.

(geddit? dominos pizza is toppy!)

Edited by leonardratso
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3 minutes ago, locky82 said:

I never understood how this company really made money. I used to have a flat mate and we had to move twice. Both times he got the Provident lady round and 'borrowed' a monkey before moving. It never caught up with him. 

https://www.providentpersonalcredit.com/

APR 1557% over 13 weeks

Cheaper option is to borrow at 300% over 52..................

 

 

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3 minutes ago, thewig said:

why do you think its market manipulation and intervention? markets don't move in straight lines!

I wouldn't buy this particular dip on the retrace though.

This is from the Independent recently:

Quote

Provident Financial set to fly as inflation puts squeeze on household budgets

The high-interest lender that targets lower income groups should do well in Brexit Britain

...Wages are unlikely to keep up. If you work in the public sector, they’re already running behind. So people are going to get poorer. 

All of which makes things more difficult for those whose households budgets may be under pressure. Which brings us to Provvie.

People feeling the squeeze are going to beat a path to its door to help spread the rising cost of occasions like Christmas, birthdays, weddings, funerals. 

...A low-waged Britain is fast becoming a Provident Financial nation. As Brexit looms, that status will be underlined.

http://www.independent.co.uk/news/business/comment/provident-financial-set-to-fly-as-inflation-puts-squeeze-on-household-budgets-a7530941.html

Despite all that stimulus that still needs to be paid for, it wouldn't be a huge surprise if Britain did turn out to be a Provident Financial nation.

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25 minutes ago, suresh786 said:

Why lloyds, RBS are not falling along

Well Prov has a current market cap of 800 million pounds post crash which is still in excess of the balance sheet at 31st December (790m)..that could be virtually nothing now with delinquent loans. Lloyds has a price to book of less than one......the price of Lloyds is already nuked.

Edited by crashmonitor
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Probably many of us have seen this before but it's so appropriate for these troubled economic times...

MARY is the proprietor of a bar in Dublin. She realises that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronise her bar – she will go broke.

To solve this problem, she comes up with a new marketing plan that allows her customers to drink now, but pay later.

[read on]
http://www.independent.ie/regionals/corkman/lifestyle/our-drunken-economics-explained-27089378.html

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Just now, leonardratso said:

well, everyones allowed their balls ups, i see a while back terry smith (fundsmith) sold dominos pizza to buy idexx laboratories because he though dominoes was topped out. idexx still did well, but dominoes plateau'd for a while and took off again - so he made a hash there as well, proves nobody is infallible.

I agree,we all make duff investments.His returns have been fantastic as have most of his calls over this cycle.Just looking at the income portfolio though its very structured to growth picking up in the UK.He is no doubt furious with the provi execs.

 

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