top of page

Wise's 280% Increase in Profit as Interest Rates Surge

Lanon Wee

Wise announced a total income of £656 million, which included interest income, in their interim results, representing an increase of 58% compared to the prior year. Pre-tax profit was £194.3 million, a growth of 280% from the year before. Wise has a significant amount of customer cash which will be profitable due to higher yield rates. On Tuesday, British fintech firm Wise reported almost a four-fold increase in pre-tax profits for the period ended on September 30th 2023. The company's revenue of £498.2 million was 25% higher than the year before, while its total income stood at £656 million, representing a 58% year-on-year growth. This growth was primarily driven by higher interest rates boosting the company's yields. Despite this, Jefferies analysts remain cautious on Wise's total processed volume momentum and volume per customer, noting that the boost to the company's results from higher interest income is likely unsustainable. Of note, Wise went public on the London Stock Exchange in 2021 and has a market capitalization of £7 billion ($8.7 billion). Its share price has risen 25% since the start of the year. Harsh Sinha recently took over the role of CEO from co-founder Kristo Kaarmann, who began a three-month sabbatical in September. On Tuesday, Wise shares remained largely unchanged. Results have been devastating for stocks in the payments sector, which dropped significantly in recent weeks due to outcomes demonstrating a slowdown in momentum and a return to reality from the flourishing period of the pandemic induced boom in digital payments. "Claims of fintech's demise have been exaggerated," Simon Taylor, leader of strategy at Sardine.ai, a regulatory technology company, declared to CNBC on Tuesday in an email. "The general opinion was that 'risk assets', including fintech, would be the most affected by an increase in interest rates. It has actually had the opposite effect. An improvement in rate state was supposed to be in favor of the banks, however, it has had a more positive impact on fintech firms. Wise has gained a lot more from higher rates than the banks have, seeing that it is advancing revenue and market share," Taylor said.

0 comments

Comentarios


We help clients solve critical operational, business & financial issues using innovative technologies such as Web3 & Blockchain.

Address:

20 CECIL STREET, #05-03, PLUS, Singapore 049705

2023 Intric Technologies Pte Ltd

bottom of page