Payday lender expected to report huge fall in pre-tax profit, but disputes £50m figure quoted in some reports

This article is more than 5 years old

This article is more than 5 years old

Controversial payday lender Wonga is expected to report a near-40% collapse in profits next week.

The company, which has come under sustained attack for charging interest rates as high as 5,853% a year, is expected to report annual profits of about £50m for 2013 compared with £84.5m the previous year, according to Sky News.

Wonga, which has previously leaked its financial results to the Sunday Times before publishing them at Companies House, said the company did not leak the figures to Sky News and said the reported £50m pre-tax profit figure was inaccurate.

“We will release the results democratically on Tuesday,” a spokesman said.

The report comes soon after Wonga brought in respected City veteran Andy Haste to shore up the company’s reputation following a series of scandals. “Wonga has understandably faced criticism and we know we need to repair our reputation and regain our right to be an accepted part of the financial service sector,” Haste said when he took on the £500,000-a-year job in July.

In June, Wonga was fined £2.6m for sending threatening legal letters from fake law firms to 45,000 customers. The Financial Conduct Authority (FCA) said Wonga had been guilty of “unfair and misleading debt collection practices” by creating fake companies, using the names of employees.

Haste, a former executive of insurer RSA, joined Wonga as executive chairman in July following the exit of Wonga’s founder Errol Damelin and former chief executive Niall Wass.

Haste is acting as chief executive and chairman while the company searches for a new permanent chief executive. Wonga has appointed Tara Kneafsey, also formerly of RSA, as managing director of Wonga UK.

Wonga has been attacked for what critics have called “legal loan sharking”, uniting London Labour MP Stella Creasy and the archbishop of Canterbury, Justin Welby, in condemnation of the high cost of its loans.

In July the Church of England ended its indirect investment in Wonga – a holding that had “embarrassed” and “irritated” Welby, who had said he wanted to compete Wonga out of existence by boosting credit unions.