Investments 

FCA probes top Woodford holding making share price dive

FCA probes top Woodford holding making share price dive

The Financial Conduct Authority (FCA) has launched an investigation into Moneybarn, which is part of Provident Financial, a top-ten holding for the fund manager Neil Woodford.

Provident Financial shares are down 16 per cent this morning (5 December) in the wake of the announcement.

Moneybarn specialises in providing car loans to customers with an impaired credit history.

In a stock exchange announcement this morning the company said the FCA is investigating Moneybarn’s “treatment of customers in financial difficulties” and the affordability tests it applies to customers seeking credit.

Provident Financial said it will work with the FCA to resolve any issues.

Provident Financial accounts for 2.2 per cent of the capital of the £8.2bn Woodford Equity Income fund, an investment that equates to around £176m. It is also held in other segregated mandates run by Mr Woodford.

Provident’s share price suffered earlier this year when problems were revealed in its doorstep lending business, the shares are currently (5 December) £7.32, having been £28.50 on 5 December 2016.

Mark Barnett, who runs the £11bn Invesco Perpetual High Income fund, is also a backer of Provident Financial, though the company is not among the top ten investments.   

David.Thorpe@ft.com

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