Moneyway saw its impairment losses double from 2015’s figure to £14.6m, due to an increase in voluntary terminations from customers.
Moneyway’s parent, Secure Trust Bank, said that its motor finance offering had experienced a ‘mixed year’. In January, Moneyway announced its exit from unsecured personal lending, which its parent company attributed to aggressive pricing.
In their 2016 results, its parent reiterated that non-bank new market entrants and existing lenders were participating in a price war.
Secure Trust said: “These new players compete by charging relatively low rates of interest to borrowers, offering very high introducer commission rates and competing aggressively to attract customers.”
The lender said that it had taken a tactical decision not to compete, and said this had affected the mix of their new business as better quality business had been diverted to their competitors with “aggressive pricing and commission”.
The bank added that in the second half of 2016 the overall quality had increased, and the motor finance offering saw lending balances grow 42.5% year-on-year to £236.2m.
Balances of unsecured personal lending fell 12% year-on-year to £65.5m, due in part to the lender’s earlier exit from the market.
Secure Trust Bank saw its loan book increase to £1.32m, up 38% year-on-year from £960.6m, and customer numbers increased 42% on 2015’s figure, to a total of 754,968 customers. Total profit before tax at Secure Trust Bank increased to £137.5m year-on-year in 2016, according to the bank’s 2016 results.