The value of loans advanced last year was £732m, a 36% decrease on 2013 lending which stood at £1.1bn. Transaction levels fell from 3.7m loans to 2.5m loans in 2014 with customer numbers falling from 1m to fewer than 600,000 in the UK.
Profits took a severe hit due to falling revenues, rising operating costs and a £35m customer compensation scheme leaving Wonga facing a pre-tax loss of £37.3m compared to a profit of £39.7m in 2013.
In 2014 revenues declined by 37% to £217m while increased staff numbers and FCA regulation costs drove up operating costs by 12%.
Chief financial officer Paul Miles said the numbers reflected the tough but necessary changes made by the business.
“Last year was focused on addressing the problems of the past and this will continue in 2015. We have the financial resources to invest in our people, systems and products while significantly reducing our cost base to create a sustainable business for the long term. However, our 2015 results will reflect what will be another tough year.”
Miles said Wonga’s aim was to launch into new products to grow its loan book in 2016.
Wonga’s chief executive Andy Haste, who joined the troubled short-term credit lender in July last year, said he had set out six priorities for the company which he was fully aware would make Wonga a smaller less profitable lender in the near term. Haste said Wonga wanted to create a sustainable business which lends responsibly and transparently to customers who can afford to take out loans.
“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,” he added.
