The UK’s largest sub-prime personal loans lender, Amigo Loans, further entered into troubled waters as the chief executive and chairman of Amigo Loans both said that they will quit following a boardroom shake-up which saw the return of founder and largest shareholder James Benamor.
Hamish Paton the CEO of Amigo has been in the Chief Executive role for little under five months, resigned along with chairman Stephan Wilcke as the battle for control over Amigo heats up. The other departure is Clare Salmon, head of the remuneration committee, who said she would step down “at the first suitable opportunity” outgoing Chairman Wilcke said:
“It has been fascinating and gratifying to lead the board of Amigo. Clare and I will work with the board to ensure an orderly succession to take Amigo forward. I’d like to thank Hamish for working with the board in implementing necessary changes during a challenging period, and his continued commitment until his successor is found.”
James Benamor founded the Bournemouth-based company in 2005. In the Summer of 2018, James stood down having floated the company on the London stock exchange for £1.3 billion. However, since its floatation, Amigo Holdings PLC (LON: AMGO) has seen its share price decline by more 75%, which includes a 50% plunge in a single day in August following a loan growth warning to shareholders.
Through the Richmond Group, Benamor owns 61% of Amigo and it is rumoured that today’s shake up was caused by a deep split between Benamor and Paton over the company strategy. Some have speculated that Benamor disagreed with Paton over her plans to introduce lower rates to lower-risk customers in order to broaden Amigo’s customer base. Benamor now joins a seven-person board along with another Benamor-backed appointee, Kelly Black. Both appointments are with immediate effect.
The Financial Conduct Authority recently finished a review of the guarantor loans industry, and forced Amigo into clarifying its response to the FCA report. The City watchdog is looking into affordability measures within the entire whole subprime sector, which could cause further changes at Amigo. The company has had its practices under the watchful eye of the FCA and already earmarked funds for Guarantor Loan Refunds due to disgruntled customers.
Amigo Loans issues unsecured personal loans between £500 and £10,000 with annual interest rates up to 49.9% to those that have trouble accessing traditional forms of high street lending. The collapse of Wonga and more recently QuickQuid left Amigo Loans as the UK largest sub-prime personal lender but also the main focus of the FCA review.
All eyes will now be on James Benamor and the Amigo Holdings share price to see if there is a rebound in fortunes.