THE company behind subprime lender Amigo Loans said that it had seen a massive drop in profit.

Bournemouth-based Amigo Holdings made a £3million pre-tax profit in the three months to June 30, an 83 per cent drop from its £18.1m profit this time last year, it said this morning.

Investors had been expecting a fall, as the company paused most new lending and extended payments holiday to 47,000 customers during parts of the Covid-19 pandemic.

The latest news came soon after the publication of its annual report and accounts which show Amigo Holdings made a loss in the financial year that ended on March 31, 2020.

Amigo reports annual loss as complaints rise

Amid warnings that it may not be able to continue trading, the struggling lender was thrown into a battle over its future with founder James Benamor.

On Monday, the board urged Mr Benamor not to insist on calling a shareholder vote on a series of proposals which would, among other things, fire many of the directors and install him as chief executive again.

However, the company said on Friday that Mr Benamor had now withdrawn his demand that shareholders get to vote on whether to remove chief executive Glen Crawford from the parent company’s board.

After missing an original June 26 to clear up its backlog so that complaints are dealt with in eight weeks, Amigo was granted an extension until October 30 by the Financial Conduct Authority (FCA).

On Friday the business said it was on track to meet the target.

Finance director Nayan Kisnadwala said: “The whole team at Amigo is focused on addressing our legacy issues and building a sustainable business for the long term.

“Operationally we have turned a corner in our handling of complaints.

“We are on track to meet the agreement reached with the FCA to resolve our complaints backlog and continue to work with the FCA on its ongoing investigation.

“We have adequate liquidity and funding to support our ongoing business activity.”

Revenue dropped 31.7 per cent to £48.8m.