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Providian, NextCard hire advisers
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November 1, 2001: 3:16 p.m. ET
Credit card lenders exploring business options, including sale.
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NEW YORK (CNNmoney) - Providian Financial Corp. has engaged Salomon Smith Barney and Goldman Sachs & Co. to look at its business options, which may include a sale.
San Francisco-based Providian (PVN: down $0.65 to $3.24, Research, Estimates) hired the bankers to assist it and its board in evaluating a broad array of financial and strategic alternatives, the company said in a statement late Wednesday.
"A sale is an option and one of many options," a source familiar with the situation said.
Other choices being considered include asset disposition, balance sheet restructuring or a business combination, the source said.
On Oct. 18, Providian announced a five-point plan to boost the company's risk profile and address earnings challenges.
Providian, which specializes in lending to people with poor or bad credit, declined to comment.
Shares of Providian have dropped nearly 95 percent from their 52-week high of $64.06 and shed a further 14 percent Thursday. The credit card issuer has market cap of about $1.1 billion and managed assets of over $36 billion.
Separately, NextCard Inc. also hired Goldman Sachs to explore a sale.
San Francisco-based NextCard (NXCD: down $0.02 to $0.85, Research, Estimates), which generates credit card accounts via the Internet, has had a large problem with fraud, analyst Jennifer Scutti of CIBC World Markets said.
Government regulators are requiring NextCard to build up its reserves and to limit new account originations, the company said in a release.
"NextCard can't add one new account until it builds up reserves," Scutti said.
Shares of NextCard fell nearly 84 percent Wednesday but staged a small rebound Thursday, up more than 1 percent.
NextCard could not immediately be reached for comment. 
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