Provident Financial's shares plunged more than 66pc as investors digested a fresh profit warning from the company as well as the shock departure of its chief executive and a scrapped dividend.
The fall wiped around £1.7bn off its value as its market capitalisation fell from around £2.58bn overnight to just £791m.
The FTSE 100 company announced that boss Peter Crook had left with immediate effect just a month after insisting it was on the "road to recovery". In a statement Provident warned that it could make losses of between £80m and £120m in its home credit business this year after it recently changed the way it collected loans.
That compares to a £60m profit forecast announced just three months ago, when the Bradford-based group alerted shareholders that profits in the division were expected to halve from £115m in 2016.
Provident was set up in 1880 to provide affordable credit to poor families in Yorkshire, and its home credit business relies on agents to knock on customers' doors and offer them loans or ask for repayments.
Manjit Wolstenholme will assume the role of executive chairman immediately, making her responsible for fixing a unit in "rapid deterioration."
Ms Wolstenholme told The Telegraph that she would now review every part of the home credit business to find out why its change in debt collectors was executed so badly.
"My job is to get the announcement out there and crack on. It's just a matter of knuckling down," she said, adding that she would look externally as well as internally for any people she needs to bring in. "There's no-holds barred on what we're looking at here."
The problems stem from a rejig of the company's door-to-door salesforce earlier this year, when it was left with fewer loan collectors than expected after deciding to employ 2,500 full-time agents who visit homes to make new loans or collect repayments, instead of 3,800 part-timers.
The shift saw its debt collection rates drop from 90pc a year ago to 57pc, with sales around £9m per week lower than the comparative weeks in 2016.
Investors were also told that they would not be receiving the half-year dividend they were promised only a month ago, with a full-year payout unlikely.
As the shares plunged, losses among the company's top investors were huge [see box]. Star fund manager Neil Woodford saw his 18pc holding fall £300m in value to £168m, although he issued a bullish outlook saying that while he was "hugely disappointed" he believed things would "ultimately get back on track."
"This business has been around for more than a century and I believe it will be around for many decades to come," he said.
While the company said that performance in its other units - Vanquis Bank, Moneybarn and Satsuma - remained in line with internal plans, it also flagged in its trading update that Vanquis was facing an investigation by the Financial Conduct Authority over one of its products.
RBC Europe analyst Peter Lenardos said the "quadruple whammy" of bad news unveiled on Tuesday - a fresh profit warning, no dividend, an FCA investigation and the chief executive departure - led him to believe the shares "are not investible until greater clarity is received, which may not be until next year at the earliest".
Shares in the company closed down 66pc.
Copy of Losses among Provident’s top investors