LOANS firm Provident Financial is expected to report a pre-exceptional loss of £120 million.

The Godwin Street-based group says this figure is at the "upper end of the guidance provided in August last year". It also reflects a lower than expected rate of reconnection through the fourth quarter of last year.

It adds its home credit customers relationships had been adversely impacted after the "poorly executed migration to the new operating model in July 2017".

This reflects a turbulent year for Provident after its chief executive Peter Crook stepped down with immediate effect in August last year after it had to issue a series of profit warnings.

Manjit Wolstenholme had taken over the running of the Bradford-based firm following Mr Crook's departure but she died in November last year aged 53.

Provident Financial bosses say they are making progress in its search for a new group chief executive.

But home credit management has provided Provident with substantial improvements in customer service since August last year and it now has 530,000 active customers, which is up 30,000 from September 2017.

Both of Provident's companies, credit card issuer Vanquis Bank and car finance provider Moneybarn, have started talks with the Financial Conduct Authority (FCA) over its respective investigations. FCA is investigating a Repayment Option Plan (ROP) Provident offers through its Vanquis Bank arm. The FCA indicated that it has concerns about the ROP product and is investigating the period from April 1, 2014 to April 19, 2016.

These figures were reported in an update on trading for the financial year ended December 31, last year. These are ahead of the firm's final results which will be announced on February 27.

Malcolm Le May, interim executive chairman, said: "I am pleased to report that good progress has been made towards restoring customer service in the home credit business and that we are engaged in a dialogue with the FCA with a view to reaching a resolution of the regulatory investigations at Vanquis Bank and Moneybarn.

"In addition, we continue to make progress in the search for a new group chief executive.

"All of our businesses have strong positions in their respective markets.

"Our priorities for 2018 are to rebuild trust with our customers, regulators, shareholders and employees.

"I would like to thank all our employees for their continuing hard work and dedication throughout a difficult period for the group."

Meanwhile, Vanquis Bank reported its total new customer bookings for 2017 were up from 406,000 in 2016 to 437,000 last year. Customer numbers ended the year at 1,710,000, for an 11 per cent year-on-year increase.

Moneybarn reported customer numbers and receivables ended the year at 50,000 and £376m, showing year-on-year growth of 22 per cent and 26 per cent

Providential Financial said the group has cash resources of £34m. This excludes the liquid asset buffer held by Vanquis Bank, and 'headroom' on the group's committed debt facilities which amounted to £66m.