EXECUTION COPY
EXHIBIT 10.23
                                  EXHIBIT 10.23


                                 THIRD AMENDMENT


                  THIRD  AMENDMENT dated as of June 1, 1996,  between  Providian
Corporation,  a Delaware  corporation (the "Company"),  and Irving W. Bailey, II
(the "Executive").


                              W I T N E S S E T H:


                  WHEREAS,  the  Company  and the  Executive  are  parties to an
employment  agreement  dated as of February 17, 1988, as amended  August 9, 1989
and February 21, 1996 (as so amended, the "Employment Agreement"); and

                  WHEREAS,  the  Company and the  Executive  desire to amend the
Employment Agreement.

                  NOW, THEREFORE, it is agreed as follows:

     1. Section  1(k)(ii) of the Employment  Agreement is amended to read in its
entirety as follows:

                  (ii)  a breach of Section 2(c) below;

     2. Section 1(q) of the Employment Agreement is amended by adding to the end
of clause (ii) thereof the following:

         ; or
                  (iii) to the extent set forth in Section  10(d),  by virtue of
         the Company providing a notice pursuant to Section 2(b) that causes the
         initial Term of Employment not to be extended for at least two one-year
         periods (i.e., until at least June 30, 2001).

     3.  Section  1(r) of the  Employment  Agreement  is  amended to read in its
entirety as follows:

                           (r)  "Total   Cash   Compensation"   shall  mean  the
         Executive's  Base Salary and any bonuses earned by the Executive  under
         Sections 4 and 5 below for any year  whether or not such Base Salary or
         bonus is paid in a subsequent year;  provided that said amount shall be
         increased  for each year  beginning  January  1, 1997 by a  replacement
         amount equal to the Executive's Base Salary for such year multiplied by
         the Replacement Percentage. For purposes of the foregoing sentence, the
         Replacement  Percentage  shall  equal  0.4  times  the  portion  of the
         Executive's  Award  Percentage,  as  defined  in  Company's  Management
         Incentive  Plan,  actually  earned by the Executive for the  applicable
         year.

     4. Section 2 of the Employment Agreement is amended to read in its entirety
as follows:

                  2.  Term of Employment, Positions and Duties.
                           (a) The Company hereby employs the Executive, and the
         Executive hereby accepts  employment with the Company,  for the Term of
         Employment,  in the positions and with the duties and  responsibilities
         set forth  below,  and upon such  other  terms  and  conditions  as are
         hereinafter stated.

                           (b) The initial Term of Employment  shall commence on
         the date hereof and shall  terminate upon the close of business on June
         30, 1999. The Term of Employment  shall  automatically  be extended for
         successive one-year periods unless either Party gives written notice to
         the  other,  not less than one year  prior to the  otherwise  scheduled
         expiration of the Term of  Employment,  that it or he does not want the
         term to so extend.  Unless the Term of Employment shall have previously
         expired,  upon the  occurrence  of a  Change  in  Control,  the Term of
         Employment shall  automatically be extended until the third anniversary
         of the date on which a Change in Control  occurs,  notwithstanding  any
         prior  notice  of  non-extension  given  pursuant  to  the  immediately
         preceding  sentence;  provided,  that any  extension  pursuant  to this
         sentence shall not extend the Term of Employment beyond the Executive's
         65th birthday.

                           (c) At all times during the Term of  Employment,  the
         Executive  shall be employed as the  Chairman of the Board or the Chief
         Executive Officer, or both, of the Company. It is also the intention of
         the  Parties  that at all  times  during  the  Term of  Employment  the
         Executive shall serve as a member of the Board.

                           (d)  During  the Term of  Employment,  the  Executive
         shall devote his full  business  time and attention to the business and
         affairs  of the  Company  and shall use his best  efforts,  skills  and
         abilities  to promote its  interests.  Anything  herein to the contrary
         notwithstanding,  nothing shall  preclude the Executive from serving on
         the board of directors of other  corporations,  engaging in  charitable
         and community affairs or managing his personal investments.

     5.  Section  10(d) of the  Employment  Agreement  is amended to read in its
entirety as follows:

     (d) Termination  Without Cause. In the event there is a Termination Without
Cause of the Executive's employment, he shall be entitled to:

     (i) his Base Salary through the date of termination of his employment;

                          (ii) a bonus  equal  to the  product  of (A) his  Base
         Salary in effect on the date of termination of his employment  prorated
         to the date of such termination, and (B) the Bonus Percentage;

                         (iii)  his  Base  Salary,  at the  rate  in  effect  at
         termination of his employment,  until the second anniversary of the end
         of the initial  Term of  Employment  under  Section  2(b) or, if later,
         until  the  earlier  of (A) 24  months  following  his  termination  of
         employment and (B) the Executive's 65th birthday;

                          (iv) annual bonuses equal to his Base Salary in effect
         at termination of his  employment  multiplied by the Bonus  Percentage,
         until  the  second  anniversary  of  the  end of the  initial  Term  of
         Employment under Section 2(b) or, if later, until the earlier of (A) 24
         months  following his termination of employment and (B) the Executive's
         65th birthday,  such bonuses to be paid at the same time annual bonuses
         are regularly paid by the Company to its senior management and prorated
         for any portion of the period which is less than a full calendar year;

     (v) any  bonus  earned or  accrued  but not yet paid  under  Section 4 or 5
above;

(vi) any bonus or other  compensation  deferred  under any plans and programs of
     the Company in accordance with such plans and programs;

     (vii) the pension, if any, provided in Section 7 above;

     (viii)  continued  vesting  following  termination of his employment in any
awards of restricted stock made to the Executive,  until the second  anniversary
of the end of the initial Term of  Employment  under  Section 2(b) or, if later,
until the earlier of (A) 24 months  following his  termination of employment and
(B) the Executive's 65th birthday;

                          (ix)  continuation  in all employee  benefit  plans or
         programs  in  which  he was  participating  at the  termination  of his
         employment,   including,  without  limitation,   continued  accrual  of
         benefits  under the Plan and  Excess  Benefit  Plan,  until the  second
         anniversary of the end of the initial Term of Employment  under Section
         2(b) or, if later,  24 months  following his termination of employment,
         but in no event beyond the earlier of (A) the Executive's 65th birthday
         and (B) the date, if any, the Executive  receives  equivalent  coverage
         and benefits under the plans and programs of a subsequent employer; and

     (x)  other  benefits  in  accordance  with the plans  and  programs  of the
Company.

                           In the event that the  Executive may not be continued
         in any employee benefit plan or program,  as provided in (ix) above, he
         shall be  provided  with the  after-tax  economic  equivalent  thereof.
         Without  limiting the foregoing,  if the Executive may not be continued
         as a participant in the Plan, the Company shall have the option to make
         equivalent contributions to the Excess Benefit Plan.

                           In the event there is a Termination  Without Cause of
         the  Executive's  employment,  the Company shall,  upon the Executive's
         written request  furnished to the Company within 20 days following such
         Termination  Without Cause, make a lump sum payment to the Executive in
         amount  equal to the  Spread on the  Payment  Date with  respect to the
         relevant  options in each option grant,  multiplied in each case by the
         number of relevant options in each option grant. For the purpose of the
         immediately  preceding  sentence,  "relevant options" means any options
         granted by the Company to the  Executive  to purchase  its common stock
         that (i) are  outstanding  on the date of termination of his employment
         and remain unexercised on the Payment Date (whether or not such options
         expire  by their  terms  prior to the  Payment  Date) and (ii) by their
         terms, were exercisable on the date of termination of his employment or
         which would have become  exercisable  if his  employment  had continued
         until  the  second  anniversary  of  the  end of the  initial  Term  of
         Employment under Section 2(b) or, if later, until the earlier of (X) 24
         months  following his  termination of employment or (Y) the Executive's
         65th birthday.  The Company shall make such payment on the Payment Date
         (or, if later,  promptly  following the Executive's  request) and, as a
         condition  to  making  such  payment,  the  Executive  agrees  that all
         outstanding  options  granted to him with respect to which such payment
         is made shall  thereupon be cancelled.  In the event that the Executive
         does not request  such  payment,  each option  grant shall become fully
         exercisable  as of the date of  termination  of  employment  and  shall
         remain outstanding for the remainder of the originally scheduled term.

                           For purposes of this  Section  10(d),  a  Termination
         Without  Cause of the  Executive's  employment  shall be deemed to have
         occurred in the event the Company provides a notice pursuant to Section
         2(b) that causes the initial Term of Employment  not to be extended for
         at least two one-year periods (i.e.,  until at least June 30, 2001). In
         the event such a notice is given, the Executive will be entitled to the
         benefits set forth above as if the Termination  Without Cause (and thus
         the termination of the Executive's employment) had occurred on the last
         day of the Term of Employment  (i.e.,  on June 30, 1999 or 2000, as the
         case may be); provided, however, that if the initial Term of Employment
         is extended  for one  one-year  period (so that the Term of  Employment
         ends on June 30,  2000),  the  references  to "24  months"  in  clauses
         (iii)(A),  (iv)(A), (viii)(A) and (ix)(A) of this Section 10(d), and in
         clause (ii)(X) of the immediately preceding paragraph,  shall be deemed
         to be "12 months" rather than "24 months."

     6.  General.  Except for the  amendments  specified in Sections 1 through 3
above, the Employment Agreement shall continue in effect without any change.

                  IN  WITNESS  WHEREOF,   the  undersigned  have  executed  this
Amendment as of the date first written above.


                              Providian Corporation



                                       By





                              Irving W. Bailey, II