UK’s Digital Bank Zopa Reports Over £4 Billion in Customer Deposits

Zopa Bank, which began operations as a P2P lending platform but has evolved into a digital bank, has reportedly surpassed £4 billion in customer deposits.

Zopa Bank says it achieved this milestone in under 4 years since acquiring its banking license.

It has helped that the ISA market has been attractive for consumers seeking a tax-efficient way to save money for retirement.

The Bank of England figures reveal that UK savers have been putting aside around £3 billion each month into ISAs for a number of months now, bolstered by significantly higher interest rates.

Zopa’s Smart ISA reportedly accrued £1 billion in under a year (11 months), acquiring a considerable share of the market. Savers selected Zopa for its user-friendly app-based interface, its unique approach to saving (holding fix and easy access pots in the same ISA), as well as its greater flexibility (moving funds in and out without doing away with the allowance).

The update comes after Zopa revealed its first full year of profitability.

Zopa Bank swung to a pre-tax profit of £15.8 million for the FY ending 31 December 2023 from a pre-tax loss of £26 million for the year ending 31 December 2022.

Introduced in June 2020, the milestone notably makes Zopa Bank one of the fastest virtual banks in the United Kingdom to turn a yearly profit.

Zopa currently offers a wide range of products to serve various customer needs, including unsecured personal loans, credit cards, point-of-sale systems, car finance, savings accounts, and financial health tools.

Zopa Bank claims 1.2m customers, generating an ARR of £250 million.

Zopa achieved 30% customer growth while becoming more efficient: its cost-to-income ratio decreased from 45.8 to 38.7%.

Zopa also notes that its solid business performance opens the opportunity for strategic expansion, acquisitions, as well as the launch of current accounts.

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