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| Credit card squeeze: worst S&P 500 |
Providian was the worst performer in the S&P 500 for 2001. Having stood at $59.20 at the end of June, the share price for the US credit card company hit a low of $2.01 at the start of November - a decline of almost 97%.
The problems first manifested themselves when the company reported in its second-quarter earnings in July 2001 that it had been forced to increase write-offs for bad loans.
Providian had relied too heavily for its growth on sub-prime borrowers and was paying the price. Over the next few months the company had to modify earnings guidance and outlook a number of times and for the fourth quarter it reported a loss of $0.76 a share
The rating agencies downgraded Providian several times, taking it from a triple B entity to a single B.