Quickquid owner to take £58m hit on exiting the UK
The owner of the UK’s largest payday loan company Quickquid said it will take a £58m hit on closing down the firm and pulling out of the UK market.
US-based Enova said in its results last night that it was exiting the UK “due to regulatory uncertainty”.
The company said it was recording an after tax charge of approximately $74m (£58m), including a cash charge of approximately $43m to “support cessation of UK lending activities”.
Read more: Payday lender Quickquid lines up administrators
Cash Euro Net UK, which trades under the name Quickquid, has lined up Grant Thornton as administrator as it prepares for a potential insolvency process.
Enova’s chief executive David Fisher said: “Over the past several months, we worked with our UK regulator to agree upon a sustainable solution to the elevated complaints to the UK Financial Ombudsman, which would enable us to continue providing access to credit for hardworking Britons.
“While we are disappointed that we could not ultimately find a path forward, the decision to exit the UK market is the right one for Enova and our shareholders. Looking ahead, we believe that our diversified product offerings provide meaningful growth as we allocate our resources where we see the greatest opportunities.”
Read more: Regulator warns payday lenders over risky loans
Cash Euro Net UK was the subject of more than 3,000 complaints to the Financial Ombudsman Service in the first half of the year, and is one of the most complained-about consumer finance providers in the country.
The UK’s payday lenders have come under increasing regulatory pressures in recent years.
Wonga filed for administration in August last year after a surge of customer compensation claims for irresponsible lending pushed it over the edge.
The firm had struggled with multiple consecutive annual losses after the Financial Conduct Authority capped the fees and interest controversial short-term lenders could charge in 2014.