N Brown stakes fell by 6 per cent after the clothes retailer was forced to pay out compensation
The most recent provision by the Jacamo and Simply Be group, which has already taken a £25.2million hit for payment preservation mis-selling, relates to product insurance.
The FTSE 250 company guessed it had “identified flaws in certain general insurance products” provided by a third set underwriter and sold by N Brown to customers between 2006 and 2014, when sales finished.
It reckon ons to incur an exceptional cost of £35-40million.
Adam Cochrane, an analyst at UBS, responded: «This is a legacy issue but clearly highlights the FCA’s focus.
1 of 11
«In our view, potential areas of concern are that 1) there may be assorted legacy issues to come; and 2) there is a risk the FCA could look at at the profitability of the faith book and whether the interest rate charged by N Brown offers value for currency.
«This would depend on the profitability of the book and alternative credit providers.
«This, we swear by, is a key concern for the N Brown group given its materiality to group profits.»