Wonga shrugs off church critics as profits jump Annual pre-tax profits at Wonga, the online payday loans company, rose more than a third in 2012 to £84.5m, as more than 1m people turned to the lender for access to short-term cash. The private company, which has attracted intense criticism from politicians, charities and the Archbishop of Canterbury, increased the sum it lent out by 68 per cent year on year to £1.2bn. Net profit rose 36 per cent to £62.5m. In its first annual results meeting on Tuesday, the company - which now operates in Canada, South Africa, Spain and Poland, as well as the UK - said its ambition was to move beyond short-term consumer loans and continue expanding into small business loans, as well as online payments. Increased advertising and international expansion, which includes a stake in an Indian financial services company, enabled Wonga to more than double its customer numbers but has also pushed up the loan default rate from 6.7 per cent of sums loaned to 7.4 per cent. However, payday loan providers have come under increased scrutiny in the past year amid concern that their annualised interest rates - of up to 5,853 per cent in Wonga's case - have left many borrowers in acute financial difficulty. An investigation launched by the Office of Fair Trading last year found that many payday lenders were failing to carry out proper affordability checks. So far, nearly half of the companies involved in the investigation have opted to withdraw from the market, including The Payday Loan Company Ltd and Cash Advances Ltd. From next year, the short-term consumer loan industry in the UK will come under the jurisdiction of the Financial Conduct Authority, which will have the power to ban advertising and impose a cap on the total sums charged. Wonga, despite charging some of the highest annualised interest rates, said it welcomed the idea of increased regulation. Earlier this summer, the Church of England revealed plans to compete Wonga "out of existence" by working with non-profit credit unions to offer short-term loans. Since then, some of England's biggest councils have joined the fight against payday lending by blocking access to their websites on public computers. Six councils in Yorkshire - led by Leeds and Bradford - have now blocked almost 200 lenders" websites from appearing on staff PCs and those in libraries and contact centres. The councils represent 2.4m residents and employ 67,000 people. Last month, Plymouth in Devon banned payday lenders from billboard advertising. Speaking about the Archbishop of Canterbury's comments, Errol Damelin, Wonga's founder and chief executive, dismissed the idea that digital customers would move their business and suggested that credit unions were more likely to pick up business from the two-thirds of loan applicants that Wonga says it rejects.