The EML Payments Ltd (ASX: EML) share price is nosediving during early morning trade on Friday. This comes after the payments company provided a regulatory update relating to the Central Bank of Ireland (CBI).
At the time of writing, the EML share price is down a sizeable 12.97% to $3.22. Today's fall means shareholders have lost more than 20% in a month.
What happened?
As pointed out last night by my colleague Tristan, EML Payments advised its Irish-based subsidiary, PFS Card Services (PCSIL), had received further correspondence from CBI.
As such, regulatory concerns were raised about PCSIL's directions in respect to its remediation plan and material growth. EML Payments noted this could impact its European operations of PSCIL's business from a material standpoint.
While CBI acknowledged the remediation program and governance improvements, the proposed material growth policy is higher than expected.
Consequently, CBI proposed certain limits be applied to programs. But if implemented, this may potentially have a negative impact on the PCSIL business. This appears to have had a detrimental effect on the EML share price today.
Subject to endorsement by the PCSIL board, EML Payments will submit its plan next week. This involves a significant and detailed analysis of limits applied across almost 27,000 programs. In addition, some of these programs could be recalibrated to different limits within.
PCSIL's submission outlining potential directions is due to the CBI by 28 October.
EML Payments noted while its remediation plan remains on track, this does not affect its operations in other parts of the world. This includes its business in Australia, North American, and other subsidiaries listed in the United Kingdom, Ireland, and France.
About the EML share price
Over the course of the last 12 months, the EML share price accelerated to an all-time high in April before freefalling. As a result, its shares crashed below $2.80 and have since moved sideways, down by more than 20% year-to-date.
Based on valuation grounds, EML Payments has a market capitalisation of roughly $1.24 billion, with 373 million shares on issue.
