By Matt Ayres

Controversial short-term lender Wonga made a pre-tax loss of £37.3m in 2014 during a major company overall.

Having made a pre-tax profit of £39.7m in 2013, the loans provider witnessed a hefty drop in lending to UK consumers.

Admitting it needed to address "the problems of the past", Wonga is predicting another loss in 2015. Last year the company apologised and agreed to pay compensation to customers after using letters from fake legal firms when chasing debts.

This left the company with a compensation bill of £2.6m to be paid to 45,000 customers, not all of whom have been located yet.

Adding insult to injury, the lender has also had to write off thousands of unsuitable loans; debts worth £220m from more than 300,000 customers were cancelled, owing to a failure to assess properly whether those borrowers could repay.