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Saturday 30 August 2014

Archbishop's blushes spared as church severs Wonga ties

Published 11/07/2014 | 10:57

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The Archbishop of Canterbury, Rev Justin Welby, has reiterated his opposition to same-sex marriage in the church
The Archbishop of Canterbury, Rev Justin Welby, has reiterated his opposition to same-sex marriage in the church

The Church of England has announced it has severed its ties with Britain's biggest payday lender Wonga, ending an association with the high-interest, short-term lender which the Archbishop of Canterbury had called embarrassing.

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The Church Commissioners, who manage the church's 6.1 billion pound investment portfolio, said the small indirect investment exposure to Wonga in the church's venture capital portfolio had been removed.

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

The move ends an awkward situation for Archbishop Justin Welby, spiritual leader of the world's 80 million Anglicans, who has pledged to drive Britain's payday lenders out of business by supporting credit unions as an alternative.

Last year, he branded Wonga's activities as "morally wrong" in a scathing attack on lenders which charge high interest rates on loans that are typically repaid when borrowers receive their next paychecks.

"I'm absolutely delighted that we are now out of Wonga and have taken no profit from it," Welby told BBC TV."

There was no immediate comment from Wonga.

The church's decision comes after Britain's financial watchdog last month 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 said the investment had been considerably less than 0.01 percent of the value of Wonga, which made a profit of £62.5m in 2012, saying it was worth less than £100,000.

They said they had never directly invested in the lender and the indirect exposure arose through pooled funds, adding the church had not made any profit from the exposure.

The commissioners said they had now made a number of ethical investment changes and would announce new controls later in the year.

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