Amigo grows Irish loan book by €2.3m as UK firm’s board drama goes on
Sean Pollock
AMIGO Holdings, a UK-based subprime lender, has grown its Irish loan book by €2.3m and added over 1,000 customers in Ireland in three months.
In Ireland, Amigo provides loans of up to €5,000 to people who may have been declined by banks and credit unions, by listing a friend or family member as the guarantor. It first entered the Irish market in February 2019, where it offers loans with an annual interest rate of close to 50pc.
According to Amigo’s financial results for the nine months to December 2019, the Irish subsidiary has increased its gross loan book to €7.1m, up from €4.8m in September. It now has over 2,900 customers, up nearly 1,100 in the same three-month period.
Its third-quarter results were less positive across the group, however. Amigo Holdings saw pre-tax profits hit £53.5m (€61.5m), down from £79m. It has also set aside £26.6m to deal with a surge in affordability complaints, up from £10.4m a few months ago. It had used £7.9m of that money.
In the UK, the sub-prime lending sector has faced several complaints from customers who believe they were approved for loans which they could never afford to repay. Figures released this month show that in the final three months of last year, 90pc of affordability complaints about guarantor loans referred to the UK’s Financial Ombudsman Service were upheld, which is a higher proportion than for payday loans.
Last week, major shareholder and Amigo founder James Benamor quit the board and accused the company of “committing slow-motion suicide”. He claimed Amigo “must immediately cease lending, collect in the book, pay down debt and proceed directly to judicial review [of these decisions by the Financial Ombudsman Service]”.
Amigo said Benamor’s analysis of the situation was wrong. “The company monitors its loan book regularly and has concluded...it does not have a systemic problem.” The company failed to respond to a request to discuss its Irish results.