Amigo customer base halves despite promises to return to lending
Amigo’s customer base has halved over the past year, despite promises it will return to lending by February next year and undergo a capital raise.
The beleaguered lender, which stopped lending in 2020 in order to deal with mis-selling complaints, has also had its revenue plummet nearly 70 per cent in the three months to 30 June to £10.4 from £32.5m in the same period last year.
Subject to consent by the Financial Conduct Authority, Amigo will return to the market with a revised guarantor loan and an unsecured non-guarantor loan product. The new products will be released under the RewardRate brand, in what the business has called “a new start”.
The capital raise, which should be a minimum of £15m to support future lending and still requires shareholder approval, must be completed by 26 May next year, the company said in a trading update today.
Supervisors from audit giant PwC will publish a report on Amigo’s progress in early September.
“We continue to engage positively with the FCA around our return to lending,” CEO Gary Jennison said in a statement. “This is the next step in our recovery, ahead of a proposed capital raise and would enable a new start for the business having taken on board the learnings from the past.”
Jennison said last month there were “not enough providers left” in the non-standard lending sector.