Challenger bank Shawbrook had more than 20 per cent shaved off its share price when markets opened this morning after it announced an additional impairment charge of around £9m in the second quarter.
The charge is the result of "a number of loans" being underwritten in the company's Asset Finance division that did not meet lending criteria, the company announced in a trading update.
Stocks fell more than 27 per cent to 119.35p per share this morning.
Shawbrook's shares were already down 21 per cent on Friday and a further 26 per cent yesterday following the UK's vote to leave the EU last Thursday.
The bank has also confirmed that trading has been in line with guidance given in early May, with second quarter originations flat on the first quarter, though up around 35 per cent on the same period in 2015.
The company will announce its half-year results on 27 July.
Chief executive Steve Pateman said:
While this is extremely disappointing, the irregularities were identified by the upgraded risk management systems and controls we implemented earlier this year. They have been investigated thoroughly and appropriate action has been taken.
Whilst the additional impairment charge arising from these irregularities will impact pre-tax profit for the year, performance is otherwise in line with our expectations. Our specialist and diversified market positioning provides a significant advantage as the Group continues to grow strongly and deliver superior returns through a strong Balance Sheet, a stable funding platform and a clearly articulated strategy.
Shawbrook also announced this morning that its chief financial officer Tom Wood will step down at the end of June.
Wood had been at the bank since 2012 and helped steer it through its stock market float last April.
Dylan Minto, the current director of strategy, will become interim financial head.