Losses at controversial payday lender Wonga have more than doubled as the firm continues to grapple with its turnaround.
Revenues fell 64 per cent to £77.3m in the calendar year, but costs fell 17 per cent. Wonga's pre-tax losses widened by 52 per cent on last year, to £80.2m.
The business said its decline in revenues was "driven by a reduction in UK consumer lending volumes following the implementation of stricter lending criteria at the end of 2014 and the introduction of the regulatory price cap".
Group principal default rate fell to 4.4 per cent in 2015 from 7.4 per cent a year earlier. In the UK, the rate fell from 6.6 per cent to 2.8 per cent over the same period.
Why it's interesting
Regulatory changes are, of course, just one part of the Wonga story.
The payday lender has faced huge criticism for the way it conducted business in the recent past, narrowly escaping a criminal investigation over fake letters used to pile pressure onto customers while shedding a number of top bosses and being forced to admit the business got it wronga.
Last year the firm slipped into the red; this year it has fallen further - but the new team insist there is light at the end of the tunnel.
What Wonga said
“We said last year that our 2015 results would reflect what would be another tough year in Wonga’s transformation and the numbers are in line with our plans, " said Paul Miles, group chief financial officer. “2015 was a year of transition for Wonga. In 2016 we expect revenues to increase significantly, driven by continued growth in Poland and Germany and a return to growth in the UK and South Africa.
"While this year as a whole will again be loss-making, it will be considerably less so than in 2015."
Chairman Andy Haste added: "We have made real progress towards creating a sustainable business with an accepted place in financial services [and] we expect 2016 to mark a turning point in our financial performance.
“Moving into 2016, our plans included achieving UK authorisation, raising debt funding and starting to roll out new products. Having achieved these, and with further funding planned for later this year, we’re now in a position to move back into growth in 2016 and expect to return to profit in 2017.
“There is still a great deal to do but we are making real progress and I would like to thank all of my colleagues for their hard work and commitment and our investors for their continued support. We are looking forward to building on the solid foundations we have put in place.”
Times are still tough for the controversial lender, but management is making progress with the turnaround.