Wonga has posted pre-tax losses of nearly £65m for 2016 but says it is expected to return to profit in 2017. The annual report shows revenue was £76.7m, up from £65.2m.

Wonga has said that it is on track to return to profitability in 2017, now that its sponsorship of football team  Newcastle United had ended.

The group revealed in its latest set of results that provisions for compensation to customers in the UK and South Africa stood at £26.9m at the end of last year.

Tara Kneafsey, chief executive of  Wonga Group said “When we announced our 2015 results we said we expected to return to growth during 2016 and to profit in 2017. The business has performed in line with those expectations, driven by the three-year transformation programme put in place when the new management team joined Wonga in the second half of 2014. Over that time the business has been transformed as we have expanded our product offering, strengthened our governance, rationalised our operations and reduced our cost base. Today we have a culture at Wonga that puts customers at the heart of our business, built on the foundations of a responsible and sustainable business model.”

“2016 was a milestone year in the UK as we received full regulatory authorisation and launched our first new product in four years. In Poland we further expanded our product offering, while in South Africa we upgraded our technology platform to support our growth in instalment lending. In Spain we appointed a new CEO in Rafel Sauri who has built a strong team and is introducing a product offering in line with the wider Group.

“That progress has continued into 2017 with the launch of further new products and the strengthening of our senior management team, including the appointment of Jo Baker as Group CFO. Most recently we completed the sale of BillPay, our German ecommerce business, and we wish our former colleagues well under Klarna’s ownership. This sale is in line with our continued focus on core consumer lending and provides the resources to drive growth across our markets for the benefit of all our customers.”

“In the UK alone we believe there are 13 million people who are cash and credit constrained but find it difficult to access credit when they need it. This difficulty is shared by millions of consumers in our other markets and we are focused on serving these people in a responsible and transparent way.”

Jo Baker, Wonga Group CFO, said: “We said last year that 2016 would reflect the continued transformation of the business and see us move back into growth, and the results are in line with our plans. Group revenues increased 18% to £76.7m, driven by increased lending volume over longer terms. Our credit risk performance remains positive with our default rate of 3.4% in line with our commitment to responsible lending. Losses narrowed compared to 2015, but still reflected significant investment in the business and the costs associated with the transformation programme. We have continued to make progress in 2017, completing our programme of cost reduction and seeing consistent revenue growth across our four markets. We now have strong foundations in place to drive Wonga’s future success and return the business to profit in 2017.”