Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

Guarantor lender Amigo says unable to restart lending until 2021

Published 03/11/2020, 07:27
Updated 03/11/2020, 07:40
© Reuters.
AMGO
-

LONDON (Reuters) - Amigo (L:AMGO) said on Tuesday it has dropped plans to resume new lending until 2021, and would instead focus on loan collections and clearing a backlog of customer complaints as the pandemic continued to cast a pall over its business.

The British subprime lender had said it was making preparations to restart lending as soon as possible but has revised this timetable in view of "continued uncertainty" as the UK enters a second COVID-19 lockdown on November 5.

"We are fully aware of our responsibilities as a lender and the important role that we play for millions of people in the UK that are unable to get a loan from a mainstream bank," the company said.

Amigo said it had "turned a corner" in its handling of complaints but the overall number received has remained at a high level for longer than expected.

It has stepped up capacity to manage the volumes and was taking a robust approach to dealing with claims management companies (CMCs) including reporting concerns about the behaviour of specific firms to the Financial Conduct Authority.

It now expects provisions to resolve such complaints to rise from 116.4 million pounds at the first quarter to in excess of 150 million pounds, leading to a profit and loss charge in excess of 85 million pounds.

During the three months to 30 September 2020, Amigo settled around 47 million pounds of redress to customers. Around 60% was settled by cash payments, with the remaining amount handled by adjusting loan balances.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.