Subprime lender Amigo abandons sale

The lender has been active in the Irish market since last year

Amigo started lending in the Irish market in February 2019, targeting people turned down by traditional lenders. Photograph: iStock

Amigo started lending in the Irish market in February 2019, targeting people turned down by traditional lenders. Photograph: iStock

 

Subprime lender Amigo is no longer up for sale after a potential bidder pulled out of the process and its chairman, Stephen Wilcke, resigned on June 7th, it said on Monday.

There were no other offers for the company, Amigo said in a statement.

The UK’s Financial Conduct Authority said last week it had launched an investigation into Amigo’s creditworthiness assessment process.

Amigo was not recommending a final dividend for the year ending March 21st 2020 and expected to report a “material increase in provision” due to customer complaints in its full-year results.

It said the cost of clearing a backlog of complaints covered by a voluntary arrangement with the FCA would be at least £35 million (€39 million) and could be “materially higher”, with customer complaints increasing significantly in recent weeks.

Goodbody analyst John Cronin said the company’s announcement “again raises concerns over the size of the potential complaints hole”.

The moneylender started lending in the Irish market in February last year, targeting people who have been turned down by traditional lenders, and offering loans of up to €5,000 at an annual rate of 49.9 per cent.

The listed lender operates a guarantor model, whereby it lends to “people with bad credit”, who are backed by friends and family with a better credit rating.

The company said in December its Irish loan book stood at €4.8 million. – Reuters