Wonga Confirms Weekly Profit Of More Than £1m

One of the biggest names in the controversial payday loans industry has confirmed it is making more than £1m in profits per week.

As first reported by Sky’s City Editor Mark Kleinman , a surge in customer numbers helped Wonga earn profits after tax of £62.5m during 2012 – a 36% increase on the previous 12 months.

The company, which offers short-term loans to households and businesses, said revenues rose by 67% in the period to £309.3m and it lent £1.2bn – 68% more than in 2011 – in total to more than one million people.

The payday industry is currently facing a Competition Commission inquiry amid concerns over how it operates.

Today, Wonga’s founder and chief executive Errol Damelin insisted the online lender was “upfront and transparent”, adding it makes 5p of profit on every £1 it lends.

He said: “This is not about people on breadlines being desperate and us being a lender of last resort. We reject two-thirds of applications.”

Instead he said the industry has been tarred by behaviour of other high-interest lenders.

“There’s a lot wrong in how other parts of the industry operates,” he said.

And Mr Damelin insisted the company’s profit margins were “not outrageous in any way to us.”

He added: “Our customers are telling us that we provide very good value for money.”

Wonga, which was involved in a storm of controversy recently when the Archbishop of Canterbury said he wanted the Church of England to “compete” it out of existence, also cast doubt over whether the Church can be a realistic competitor.

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Wonga Confirms Weekly Profit Of More Than £1m