July 10, 2014 / 11:02 PM / 4 years ago

Church of England severs ties with payday lender Wonga

July 10 (Reuters) - The Church of England has sold its indirect stake in Wonga, ending its association with the high-interest online lender that came under scrutiny for sending customers bogus letters.

The indirect investment exposure to Wonga in the church's venture capital portfolio had been removed, the commissioners who manage the church's investment portfolio said on Thursday in an emailed statement.(bit.ly/1rckXop)

They are pegging the value of the investment at considerably less than 0.01 percent of the worth of Britain’s biggest payday lender. Wonga made a profit of 62.5 million pounds in 2012.

In January, the Archbishop of Canterbury Justin Welby pledged to drive Britain’s payday lenders out of business by supporting credit unions as an alternative.

Britain’s financial watchdog in June ordered Wonga to pay 2.6 million pounds ($4.4 million) in compensation to 45,000 customers for sending them fraudulent letters from non-existent law firms threatening legal action.

“The Church Commissioners no longer have any financial or any other interest in Wonga,” the commissioners said in the statement.

They said the church had not made any profit from the exposure, with them valuing the investment in Wonga at less than 100,000 pounds ($170,200). The Church Commissioners manage investments worth about 6.1 billion pounds.

The church had last July admitted that funds it held in its venture capital portfolio included an investment in one of the online lender’s financial backers. ($1 = 0.5877 British Pounds) (Reporting by Esha Vaish in Bangalore; editing by Gunna Dickson)

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