Vanquis Banking Group PLC (LSE:VANQ) slumped almost 16% as it warned a series of new impairments would affect its financial strength metrics.
Ian McLaughlin, the specialist lender’s chief executive, said: "We have been carrying out a comprehensive review of our balance sheet and this has led to the revaluation of some historic balances.
“While finding these one-off items is disappointing, it does mean that our financial position is now clearer and more stable.”
In its statement, Vanquis said £29 million of the new write-downs related to its vehicle finance activities with a further £11 million for a redundant app and property.
As a result of the vehicle finance write-downs, Vanquis said its capital position or Tier 1 rating dropped to 19.7% at the end of June and will fall below its target of 19.5% - 20.5% by the December year-end.
McLaughlin added: “Our trading performance towards the end of the first half of 2024 was encouraging, with year-to-date growth in customer numbers, at better margins, and a return to growth in receivables in June."
He added that Vanquis remains on track to deliver c.£60m of committed cost savings by the end of 2024 “while complaint costs remain within previously guided levels and industry-wide initiatives to act against spurious complaints continue”.
Shares fell 8.7p to 44.3p.