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The Wise logo is displayed on the smartphone screen.
Buffalo Jonchar | SOPA Pictures | LightRocket via Getty Images
Online money transfer company Wise Shares rose nearly 18% on Tuesday as the company reported a rise in earnings thanks to higher interest income.
The company said in a statement to the stock market that its pre-tax profit tripled to 146.5 million pounds ($186.5 million). Earnings per share more than tripled to 11.53p.
That was because the company saw customers grow by 34%, total users reaching 10m by March 31, 2023, and volumes increasing by 37% to £104.5bn.
Wise was trading at around £6.18 around midday London time, up about 18% on the day.
Wise has benefited from higher interest rates, which the Bank of England raised last week to 5% as policymakers grapple with ever-soaring inflation.
Like other financial technology companies, Wise has been able to generate interest income on the funds held in customer accounts.
Monzo Bank and Starling Bank recently announced their profitability milestones, citing increased income from lending.
Wise said on Tuesday its revenue grew 51% to £846.1m, from £559.9m a year earlier.
Total income reported by the company rose to £964.2m, up 73% year-on-year. This was reinforced by the sudden increase in the amount of funds deposited by clients.
However, Wise is still grappling with a number of less positive developments.
The company’s chief executive, Cristo Carmann, last year became the subject of an investigation by Her Majesty’s Revenue and Customs over a tax bill of £365,651 which he had not paid on time.
The news is significant because it could lead to serious repercussions for Karman’s position if he is found to have breached UK tax laws.
“The FCA is still investigating and it’s taking some time,” Carman said in an interview with BBC Radio on Tuesday. .
“It’s not so much about the business we’re running, it was a personal mistake. I’ve been really late on my taxes for a long time and I’ve paid the fines.”
Wise was also the subject of a $360,000 fine by Abu Dhabi regulators for failures in anti-money laundering controls.
Karman told the BBC the issue had since been “resolved”.
Karman announced earlier this year that he plans to take a three-month vacation between September and December to spend time with his child.
Harsh Sinha, the company’s chief technology officer, is set to take over as CEO in the meantime. This has led some investors to speculate that Sinha may take over as CEO permanently. The sage himself did not indicate that this would be the case.
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