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(Alliance News) - Shares in H&T Group PLC plummeted early Monday after the company said the UK's financial regulator was reviewing "certain aspects and files" of the company's high-cost short term credit, or HCSTC, unsecured loans business.
H&T also said that it has temporarily ceased all HCSTC unsecured lending due to the ongoing review by the Financial Conduit Authority. For 2019, H&T expects HCSTC unsecured lending segment to contribute less than 4% to group revenue.
H&T shares in London were down 20% at 298.40 pence each in London on Monday morning.
The FCA review is focusing on H&T's creditworthiness assessments and lending processes for HCSTC loans, in light of regulatory changes.
H&T said it is cooperating with FCA and the review will result in changes to its policies and procedures relating to the provision of unsecured HCSTC loans.
The Sutton-based company said it will also review its historical lending practices to determine whether any customer redress is payable. Should any redress is payable, H&T anticipates to fund it from existing financial resources.
Over the past six years, the company's average HCSTC unsecured portfolio has been GBP3 million. There were total customer interest payments of GBP24 million over the six year period. Revenue, less impairment, over the period totalled GBP11 million.
In spite of the FCA review, H&T said that it continues "to trade well and in line with the dynamics set out in its statement of 30 September 2019."
By Tapan Panchal; tapanpanchal@alliancenews.com
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