Church of England severs ties with payday lender Wonga

Friday 11 July 2014 08.20
The Church of England has sold its indirect stake the payday lender
The Church of England has sold its indirect stake the payday lender

The Church of England has sold its indirect stake in Wonga, ending its association with the high-interest UK online lender that came under scrutiny for sending customers bogus letters. 

The indirect investment exposure to Wonga in the church's venture capital portfolio had been removed, the commissioners who manage the church's investment portfolio said. 

They are pegging the value of the investment at considerably less than 0.01% of the worth of Britain's biggest payday lender. Wonga made a profit of £62.5m in 2012. 

In January, the Archbishop of Canterbury Justin Welby pledged to drive Britain's payday lenders out of business by supporting credit unions as an alternative. 

Britain's financial watchdog in June ordered Wonga to pay £2.6m in compensation to 45,000 customers for sending them fraudulent letters from non-existent law firms threatening legal action.  

"The Church Commissioners no longer have any financial or any other interest in Wonga," the commissioners said in the statement. 

They said the church had not made any profit from the exposure, with them valuing the investment in Wonga at less than £100,000.

The Church Commissioners manage investments worth about £6.1 billion. 

It had last July admitted that funds it held in its venture capital portfolio included an investment in one of the online lender's financial backers.