Uncertain future for Amigo Loans after £58.2m loss

Amigo Loans has announced it has an uncertain future following the announcement of a £58.1 million half year loss.

The sub-prime lender warned of ‘material uncertainty’ after its income was hit by pandemic payment holidays and a pause in new lending.


The loss compared to a £35.8 million profit for the same period in 2019. Revenues fell more than a third to £92.3 million.

Amigo specialises in lending to people with poor credit histories providing they can produce a guarantor for their loans, but the firm has put all new lending on hold except to key workers.

It has received requests for 57,000 payment holidays because of the pandemic lockdown and says 22,000 were still active at the end of October.


The company, currently under investigation by the Financial Conduct Authority (FCA), has also been trying to deal with a backlog of 25,000 complaints by an October 30th deadline it had agreed with the regulator.

But it announced ‘a material uncertainty surrounding the going concern due to the potential economic impact of Covid-19, uncertainty over future complaint volumes and the possible outcome of the ongoing FCA investigation’.

Higher than expected

Commenting on the financial results chief executive Gary Jennison said higher than expected volumes of complaints in the previous six months had cost the company £93.7 million.

However, he added the firm has improved its processes considerably since then.

He continued: “In the past three days, we received 766 complaints from one claims management company, but 374 were rejected and 259 of those were duplicates.

We now know how to deal with them immediately. Weeks ago, we would have been overwhelmed.”

Unsecured credit

The firm said it had contributed to the FCA’s review of the unsecured credit market and is keeping them advised of future plans.

These include offering new products to people denied loans elsewhere because of their credit history or pandemic payment holidays.

These included the offering of unsecured loans without a guarantor, credit priced according to risk, and loans with built-in payment holidays.

Mr Jennison added: “We are engaging with the regulator on these products only on a courtesy basis, because we want to be open and transparent.


“It’s undoubtedly been a difficult period for Amigo but as a team we have made significant progress towards quantifying and addressing the challenges we face.

“We are much better placed operationally to manage complaints and we now understand our position better. We have appointed professional advisors to help us look at all the available options; this work is at a very early stage.


“Our focus is on ensuring that Amigo retains its position as a viable unsecured lending platform for the 10-12m adults who are excluded from mainstream bank lending. We want to meet the varied needs of these potential customers, be that through offering guarantor loans or other unsecured loan products.”

Analyst James Hamilton said the firm’s future will ultimately be decided by the Financial Ombudsman Service (FOS) saying: “They currently appear to be favouring the claims management companies.”