H&T Group Plc (LON: HAT) have seen their shares sink after the FCA triggered an investigation into ‘certain aspects and files’.
The FCA pledged to look into the companies high-cost short term credit (HCSTC) and unsecured loans business.
The review is focussing on H&T’s creditworthiness assessments and lending processes for HCSTC loans in light of new rule changes over affordability assessments, it said today.
Shares of H&T have sunk 16.99% during Monday trading to 307p. 18/11/19 13:27BST.
H&T confirmed to shareholders that it has temporarily ceased all HCSTC operations due to the ongoing investigation.
For financial 2019, H&T expected revenues from HCSTC unsecured lending to total less than 4% of total group revenue.
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.
H&T have said that they will also review historical lending practices to look into any issuances of customer redress.If redress applies, then the firm will fund it from existing financial resources.
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.”
Clearly the market reputation of H&T is at risk here, and shareholder’s will be concerned about whether the FCA will impose any regulatory fines onto the the UK based pawnbroker.
In October, it was announced that H&T had acquired Albemarle & Bond Pledge Books in an £8 million deal, which pleased shareholders.
“This is an exciting transaction and enables us to cement our position as the UK’s leading pawnbroker. Our immediate focus is to do everything we can to support A&B’s customers,” said H&T Chief Executive John Nichols.