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Wonga makes £1m profit every week

Wonga makes £1m profit every week

Category: Loans

Updated: 03/09/2013
First Published: 03/09/2013

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The UK's biggest payday lender has confirmed its profits totalled more than £1 million per week during 2012.

Revealing its results for last year, Wonga said revenues across the group increased 67% in 2012 when compared to the previous year, while its net profits rose 36% when compared to 2011.

This equates to profits of more than £1 million per week.

The results also revealed that demand for payday loans continues to grow, with Wonga lending out a total of £1.2 billion last year to more than one million consumers, a 68% increase on 2011's figure.

The three biggest lenders – Wonga, Cash America (which trades under the names of Pounds to Pocket and Quickquid), and Dollar Financial (which owns The Money Shop, Payday UK and Payday Express) control 70% of the payday loans market by turnover.

Industry crackdown

The payday loans industry is currently under investigation by the Competition Commission following a review last year by the Office of Fair Trading (OFT) that found evidence of widespread bad practice.

Nineteen of the 50 payday loan lenders ordered by the OFT to prove their practices were up to scratch have since exited the industry.

Defending the company's record profits in the midst of the industry crackdown, Wonga's founder and chief executive, Errol Damelin, told Sky News that the industry had been tarred by the bad behaviour of other high-interest lenders.

He said Wonga remained "upfront and transparent", saying the company makes 5p in profits for every £1 it lends – equating to a £15 profit on every loan.

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