for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up
Markets News

Britain's Amigo reports 83% profit fall as lending halt bites

LONDON, Aug 28 (Reuters) - Britain’s Amigo Holdings reported an 83% fall in first- quarter profit and revenue down 32% as payment holidays granted to customers affected by the coronavirus pandemic and a halt on almost all new lending hammered its returns.

The lender, which provides loans to borrowers who struggle to obtain credit from mainstream lenders if a friend or family member can act as a guarantor for them, said customer numbers fell by 5%.

Amigo is being investigated by Britain’s Financial Conduct Authority over how it assesses the creditworthiness of customers, and has become embroiled in a public row with its founder, James Benamor.

The firm said it could not provide guidance on its expected performance this year, and reiterated that the impact of the pandemic and the FCA investigation meant there is uncertainty over its ability to continue as a going concern.

“We are updating our lending processes and policies to enable Amigo to restart lending in a prudent manner by the end of 2020,” Chief Financial Officer Nayan V. Kisnadwala said.

Payment holidays, which regulators ordered lenders to provide to customers affected by the pandemic, have eaten into profits as Amigo wrote down its expected future cash flows from those loans, the company said.

Amigo reported a first-quarter profit of 3 million pounds, down from 18 million a year earlier.

Reporting by Lawrence White; editing by Jason Neely

for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up