Global Courant
The Wise logo displayed on a smartphone screen.
Pavlo Gonchar | SOPA Images | LightRocket via Getty Images
Online money transfer company Show Shares rose nearly 18% on Tuesday as the company reported a spike in earnings on the back of rising interest income.
The company said in a statement to the stock exchange that pre-tax profits tripled to £146.5 million ($186.5 million). Earnings per share also more than tripled to 11.53 pence.
That’s when the company saw 34% customer growth, reaching 10 million users in total by March 31, 2023, and volumes up 37% to £104.5 billion.
Wise was trading at around £6.18 by noon in London, up nearly 18% on the day.
Wise benefited from rising interest rates, which were raised to 5% by the Bank of England last week as policymakers grapple with persistently high inflation.
Like other fintechs, Wise has been able to generate income from interest on money held in client accounts.
Monzo and Starling Bank recently reported their own respective profitability milestones, citing higher loan income.
Wise said on Tuesday revenue grew 51% to £846.1m, from £559.9m the year before.
Total income reported by the company rose to £964.2 million, up 73% year-on-year. This was boosted by an increase in the amount deposited by customers.
Still, Wise is struggling with a number of less positive developments.
The company’s CEO, Kristo Kaarmann, became the subject of an investigation last year by Her Majesty’s Revenue and Customs into a £365,651 tax bill he failed to pay on time.
The news is important because it could have serious consequences for Kaarmann’s position if he is found to have broken UK tax laws.
“The FCA (Financial Conduct Authority) is still carrying out the investigation and it is taking a while. I think this is a bit unfortunate, but we will have to wait to hear what they conclude,” Kaarmann said in an interview with BBC Radio on Tuesday. .
“It really doesn’t have much to do with the business we run, it was a personal mistake. I was very late with my taxes a long time ago and I paid the fines.”
Wise was also the subject of a $360,000 fine from Abu Dhabi regulators for deficiencies in anti-money laundering controls.
This problem has since been “solved,” Kaarmann told the BBC.
Kaarmann announced earlier this year that he plans to take a three-month sabbatical between September and December to spend time with his baby.
Harsh Sinha, the company’s chief technology officer, will assume his duties as CEO in the meantime. This has led to speculation from some investors that Sinha could take on the CEO role permanently. Wise itself has not indicated that this will be the case.
Wise stocks rise if higher interest rates help
World News,Next Big Thing in Public Knowledg
#Wise #stocks #rise #higher #interest #rates
