View more on these topics

Wonga reports £37m loss, driven by ‘significant reduction’ in lending

Controversial payday lender Wonga has reported a pre-tax loss of £37.3m for 2014 after taking a £35m customer remediation hit following an intervention by the FCA.

The firm’s full-year results for the 12 months to 31 December 2014, published last week, reveal revenues plummeted by 31 per cent year-on-year, from £314.7m to £217.2m, driven by a “significant reduction” in UK consumer lending.

Operating costs rose by 12 per cent, from £133.7m to £150.2m, while a switch to a new third-party lending platform and risk decision system cost £15.3m.

The £35m remediation costs come after the firm agreed last year to write off 330,000 customers’ loan balances. This followed an FCA investigation that found evidence that the payday lender was failing to adequately assess people’s ability to meet repayments.

Wonga chief executive Andy Haste says: “On joining Wonga last July, I set out six priorities to deliver essential change and this period has been focused on delivering against those priorities.

“We said Wonga would be smaller and less profitable in the near term as we focus on creating a sustainable business that lends responsibly and transparently to customers who can afford to borrow from us.

“The full-year results are clear evidence of the changes we have made and are continuing to make. We know it will take time to repair our reputation and gain an accepted place in the financial services industry but we’re determined to deliver on our plans and serve our customers in the right way.”

Recommended

David-Cameron-700x450.jpg
5

Mortgage industry shows overwhelming support for Tories

The mortgage industry has overwhelmingly backed the Conservative Party with days to go until the general election. A survey of over 900 readers taken by Mortgage Strategy shows 52.8 per cent will vote for the Tories on 7 May, with Ukip the closest rivals on 15.7 per cent. Labour is in third place, on 14.7 […]

Lakey-Alan-151x206.jpg
1

Analysis: The cheap way to lose clients

Why is it that so many advisers recommend the cheapest critical-illness plan? It might be because it is the easiest plan to sell because presenting a table showing competing insurers with the cheapest at the top enables an adviser to highlight a known advantage which, unlike quality comparisons, is solid and easily recognisable. However, the […]

House-Property-Ladder-Rising-Prices-500x320.jpg

Annual lending up for first time in months

Gross lending rose year-on-year for the first time in five months in March, according to the Council of Mortgage Lenders. Lending hit an estimated £16.5bn in March, up 7 per cent on the £15.4bn advanced a year earlier. Not since October has lending been up on an annual basis. An estimated £44.9bn was lent in […]

Who cares?

By Tracey Dickson, marketing consultant There are almost 7 million carers in the UK – that’s around 10 per cent of the population who provide unpaid care for a disabled, seriously ill or older loved one.1 But according to a report from the charity Carers UK, 20 per cent of people providing 50 hours or more of care […]

Newsletter

News and expert analysis straight to your inbox

Sign up