Provident's worst day on the stock market since August 2017 deepened a more than 70 percent drop in value in the last two years as it works to win back customers after prolonged problems at its home lending business.

Provident said profit for last year would be towards the lower end of 151 million pounds to 166 million pounds range forecast by the market.

The firm blamed modestly higher impairment at its credit card business Vanquis Bank. The FTSE 250 company also guided to exceptional costs of about 55 million pounds ($70.8 million)in 2018 relating to its home credit recovery plan.

"We believe the market will be disappointed that Q4 shows a further drift down in profitability, this time from the impairment charge at Vanquis," Jefferies analysts said.

Provident, established in 1880, has been rebuilding after a botched reorganisation of its home credit business led to profit warnings, the departure of its CEO and the suspension of its dividend in 2017. It has also been under investigation by Britain's financial watchdog.

The doorstep lender, which provides credit to people who do not meet the lending criteria of mainstream banks, had begun to show some signs of a turnaround last year.

For graphic on Provident Financial investors loo
k for respite after botched reorganisation, click https://tmsnrt.rs/2AKU2MP

Sub-prime lenders have seen rapid growth in Britain over the decade since the financial crisis, as banks cut back on risky lending and years of austerity forced poorer people to borrow more.

But the high interest rates charged for loans has fuelled a public and political backlash, leading to a regulatory crackdown.

Provident has also faced lost income resulting from a Financial Conduct Authority (FCA) investigation into the Repayment Option Plan offered by Provident's Vanquis Bank and an investigation into Moneybarn, its car and van financing arm.

The lender said the refund programme to current and past Repayment Option Plan customers was on track to be substantially completed in early 2019, with more than 1 million customers refunded about 160 million pounds in cash.

The company said new customers for its troubled home credit business was marginally above plan during the last quarter of 2018. Provident also said it has been tightening its underwriting standards in anticipation of the current uncertain UK economic environment. ($1 = 0.7755 pounds)

(Reporting by Samantha Machado and Muvija M in Bengaluru; Editing by Bernard Orr/Keith Weir)

By Noor Zainab Hussain and Muvija M