Wonga has slumped to a £37M annual loss after a clampdown by UK regulators on payday lending. As part of Wonga’s effort to transform its image it scrapped its puppet adverts, removed its logo from Newcastle United football club children’s replica shirts and could change its name as part of attempts to repair its image.
Wonga reduced the number of loans in 2014 from 3.7 million to 2.5 million and cut its customers by about one million to less than 600,000 in the UK as it sought to lend only to those could “reasonably” afford to pay back. It meant revenues fell to £217.2 million from £314.7 million. Operating costs increased 12 per cent to £150.2 million as Wonga’s staff numbers mushroomed and it applied for a regulatory licence. The company also took a £15.3 million impairment charge as it decided to move to a new third party lending platform, and paid out £35 million after agreeing to write off customer debts worth £220 million for more than 300,000 customers amid heightened scrutiny from the Financial Conduct Authority.