Financial Objects, the west London supplier of banking software, has announced a £850,000 bad debt provision relating to an undisclosed customer.

The news sent the company's shares tumbling 6p to 77p, a 7.2 % fall.

A spokesman for the company refused to name the company in question, but it is thought to be a second-tier European online banking business that is not based in Britain.

Financial Objects first signalled difficulties collecting payments from the customer at a shareholder meeting last May. At the time, the company told investors that one of its clients was "experiencing liquidity problems".

Yesterday, in a statement to the stock exchange, Financial Objects said: "This client is an exception to our usual customer profile, being our only client without a banking licence, so the board is confident that this is an isolated event."

Financial Objects has more than 10 customers using its latest software package, ActiveBank, and manages older banking software systems for about 150 customers around the world.

According to yesterday's statement, management expects 2001 revenues to be slightly down on the £18.4m recorded in the previous year. Operating profits are expected to be in line with analysts' expectations, following the implementation of a cost control programme.

"The board is pleased with the group's overall performance during 2001, particularly under current market conditions, and believes that it is well positioned," the company said.

It is expected to announce full-year results in March, which will include the one-off bad debt provision for the six months to January.