Wonga rakes in over £1m a week

Payday lender Wonga has reported a year of surging profits as its number of cash-strapped customers swelled to more than one million.

The controversial company, which offers short-term loans to households and businesses, said profits after tax rose 36% to £62.5m (€73.5m) during 2012 – the equivalent to more than £1 million a week.

Revenues surged 67% to £309.3m (€364m) and it lent £1.2bn (€1.4bn) in the year, a rise of 68%.

The company, which was involved in a storm of controversy recently when the Archbishop of Canterbury said he wanted the Church of England to “compete” it out of existence, cast doubt over whether the Church can be a realistic competitor.

Founder and chief executive Errol Damelin said the online lender operates in an "upfront and transparent" way, adding it makes 5p of profit on every £1 it lends.

He said: “This is not about people on breadlines being desperate and us being a lender of last resort. We reject two-thirds of applications.”

Instead he said the industry has been tarred by behaviour of other high-interest lenders.

“There’s a lot wrong in how other parts of the industry operates,” he said.

And Mr Damelin insisted the company’s profit margins are “not outrageous in any way to us”.

He added: “Our customers are telling us that we provide very good value for money.”