Providian Hires Saunders as CEO

Providian Financial Corp. hired FleetBoston Financial Corp.’s Joseph Saunders as chief executive to help stem mounting credit card losses that have sent the company’s shares down 94% this year.

Saunders replaced Shailesh Mehta, who resigned after the fifth-biggest U.S. Visa and MasterCard issuer last month reported a 71% decline in third-quarter earnings because more customers weren’t able to pay their bills.

Saunders has faced rising default rates before. FleetBoston hired him as CEO of its Horsham, Pa.-based credit card unit in 1997 to fix credit standards and collection methods after it bought $11 billion in loans from Advanta Corp., an issuer stung by losses.

San Francisco-based Providian’s stock is down from $57.50 at the start of the year, a decline that has prompted 11 investor class-action lawsuits. Shares closed up 51 cents to $3.80 on the New York Stock Exchange.