One of the biggest payday-style lenders to emerge in the wake of Wonga’s demise has itself run into trouble, warning the stock market of tumbling profits and the risks to the business of a potential recession.

Shares in Non-Standard Finance, which operates under the George Banco, Everyday Loans and Loans at Home brands – and charges interest of up to 732% – fell by 18% after the profit warning.

NSF added that its finance chief, Nick Teunon, will stand down early next year.

NSF was a former pick of the beleaguered fund manager Neil Woodford, who at one point had a 25% stake. The profit warning comes eight months after NSF made an audacious bid, backed by Woodford, for its much larger rival, Provident Financial. The bid was abandoned in June after a revolt by other shareholders, with the failed transaction reported to have cost NSF about £10m in fees.

NSF said the rate of “delinquency” in its loan book – the number of borrowers who have fallen behind with payments – has remained broadly stable, but it was preparing for many more defaults, warning the economic outlook was worse than at any other time in the last decade.

It has decided to dramatically raise its provisioning for loans potentially going sour. In a statement to the stock market, it said: “Due to the increasingly uncertain macroeconomic outlook [and] the negative impact of previous downturns on performance, the board expects to increase the probability weighting of a stressed, or downside scenario.

“Having increased the probability weighting earlier in the year from a rate of 10% in 2018, the board now expects to increase the rate to 50%.”

It also revised downwards the prospects for future growth. It warned that volumes at its Loans at Home doorstep lending business could contract by up to 5%, compared with previous forecasts of growth of 2% to 5% a year.

In total, it said profits for 2019 will be 10-13% lower than the current consensus of analyst forecasts.

NSF’s profit warning comes just weeks after the collapse of QuickQuid, the UK’s biggest payday lender, which left more than a million customers facing financial uncertainty.

CashEuroNet UK, which operated the QuickQuid and On Stride brands, stopped lending in October after Grant Thornton, the accountancy firm, was appointed as its administrator. The business failed a year after Wonga collapsed following a surge in customer compensation claims.

Enova, the Chicago-based owner of CashEuroNet UK, decided to quit the UK after failing to reach agreement with the UK’s financial ombudsman over how many customers it should compensate over past loans.

In early November, CashEuroNet agreed with the Financial Conduct Authority to provide redress to almost 4,000 customers to the value of £1.7m.