SAN FRANCISCO, Sept. 4 /PRNewswire/ -- Providian Financial Corporation
(NYSE: PVN) today announced that it is revising its 2001 earnings guidance to
$3.20 to $3.25 per diluted share, representing a 17% to 19% increase over 2000
earnings per share before one-time adjustments. In revising its guidance, the
Company cited a recent slowdown in customer purchase activity, softer loan
demand relative to expectations, and ongoing credit tightening by the Company.
In light of these factors, the Company is planning for lower managed loan
growth in the range of 29% to 31% for 2001.
In the third quarter, the Company expects to report earnings per diluted
share of $0.82 to $0.84 and an improvement in its managed net credit loss rate
to below the second quarter rate of 10.29%. At the currently expected loan
growth levels, it is likely that the fourth quarter managed net credit loss
rate will be between 10.45% and 10.75%. The Company's anticipated loan growth
and mix will likely result in the managed net credit loss rate for 2002
remaining at or above the fourth quarter 2001 level. The Company plans to add
$50 to $75 million to its loan loss reserve during the balance of 2001.
"Providian remains highly profitable with solid returns on assets and
equity and a very strong balance sheet," said Shailesh J. Mehta, chairman and
chief executive officer. "Even though we expect to maintain industry leading
profitability per account, based on our growing scale and our objective of
optimizing the balance between risk and growth, we believe 15% earnings per
share growth is an appropriate long-term goal. While it is too early to have
a refined view of 2002, it is expected that earnings per share performance
will be lower than our long-term goal."
The Company will be hosting a conference call today at 8:30 a.m. eastern
time. The conference call is accessible by dialing: 888-391-9505,
international callers please dial 312-470-7071, and enter the conference
passcode: 8621950. A replay will be available shortly after the conclusion of
the call by dialing: 800-841-8580, international: 402-280-9934. Additionally,
the conference call will be webcast live over the internet at
http://www.providian.com by clicking on the Investor Relations section.
The Company also commented on the change made to its process for
recognizing charge-offs resulting from consumer bankruptcies. For improved
operational efficiency, the Company now batches electronic bankruptcy
notifications and charges off the related amounts once per month. The change
resulted in a portion of bankruptcies, for which notification was received on
or after June 18, 2001, being charged off in July. Because the Company's loan
loss reserves provided for estimated bankruptcies received but not yet
charged-off, the change had no impact on second quarter earnings. For the
quarter ended June 30, 2001, adjusting for the processing change, the managed
net credit loss rate of 10.29% and the managed 30+day delinquency rate of
8.04% were 10.63% and 7.99%, respectively.
About Providian Financial
Winner of the 2001 Rochester Institute of Technology/USA Today Quality Cup
for excellence in customer service, San Francisco-based Providian Financial is
a leading provider of lending and deposit products to customers throughout the
U.S., and offers credit cards and deposit products in the UK and in Argentina.
Providian Financial has been named one of America's Most Admired Companies in
a survey by Fortune magazine, one of the nation's top financial institutions
by U.S. Banker magazine, and one of the most technologically innovative
companies in the U.S. by InformationWeek magazine. The Company has more than
$36 billion in assets under management and almost 18 million customer
accounts.
Statements contained herein as to the Company's expectations and goals are
forward-looking statements under the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from those
projected. Among the significant risks and uncertainties are: competitive
pressures arising from aggressive competition from other consumer lenders;
factors that affect the delinquency rate on the Company's consumer loans and
the rate at which the Company's consumer loans are charged off; the Company's
ability to grow its consumer loan portfolio; changes in the cost and
availability of funding due to changes in the deposit, credit or
securitization markets, or the way in which the Company is perceived in such
markets; the effects of government policy and regulation, including
restrictions and/or limitations arising from banking laws, regulations and
examinations; legal proceedings; and the ability to attract and retain key
personnel. More information on risk factors affecting the Company is
available in the Company's filings with the Securities and Exchange
Commission, including its annual report on Form 10-K, quarterly reports on
Form 10-Q, and current reports on Form 8-K.
Note: Investor information is available on Providian Financial's Web site
at http://www.providian.com .
SOURCE Providian Financial Corporation
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Related links:
http://www.providian.com
CONTACT:
equity investors, Nancy Murphy,
+1-415-278-4483, or Jack Carsky, +1-415-278-4977, or fixed income
investors, Bill Horning, +1-415-278-4602, or media, Alan Elias,
+1-415-278-4844, all of Providian Financial Corporation
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