UK’s digital bank Zopa reportedly intends to double profits this financial year as it potentially prepares for a 2025 current account launch.
Digital bank Zopa is reportedly on track to significantly increase profits and boost yearly revenue by over a third this financial year due to demand for its banking services, the Fintech firm’s CEO revealed in statements shared recently with CNBC.
Zopa has reported substantial revenues of £222 million (appr. $281.7 million) this past year and is set to surpass the £300 million revenue mark this financial year, which would notably represent a 35% annual increase.
The 2024 estimates are said to be based on (unofficial) unaudited internal reports.
The digital bank’s management stated that it is set to increase pre-tax profits 2x this year. This comes after reaching £15.8 million this past year.
Zopa, a regulated banking services provider that is backed by SoftBank, has intentions to get into the current accounts markets this coming year as it aims to sharply focus on product development.
The firm provides credit cards, personal loans along with savings accounts that it provides via a user-friendly mobile app. This is somewhat similar to other digital banking platforms like Revolut which do not maintain physical locations.
In statements shared with CNBC, Zopa CEO Jaidev Janardana said that the business is doing well.
Janardana noted that during 2024, they’ve reached or exceeded the plans across “all metrics,”
The firm’s management added that the solid business performance comes after the improving overall sentiment in the UK economy, where Zopa does business.
Zopa’s Chief Executive added that while it has been a rough few years, in terms of consumers, they have “continued to feel the pain slightly less this year than last year.”
According to the firm’s management, the market is “still tight,”
And fintechs like Zopa, which aim to offer more competitive savings rates than larger banks, become more vital during these times.
A major focus area for the company moving forward is product development, Janardana revealed.
The digital bank is working on a current account product that may enable clients to manage their finances in a frictionless manner.
It’s worthwhile to note that Zopa is one of growing number of other fintechs that have been considered as a potential IPO candidate.
A few years back, the company had stated that it does intend to go public, but then placed the plans on hold. This, as higher interest rates impacted tech stocks as well as other challenges during 2022.
Janardana also shared that he does not consider a public listing as a key priority for now, however, he stated that there are indications of a better overall US IPO market in 2025.
Notably, Zopa secured $300 million as part of an investment round led by SoftBank back in 2021 and had been valued at $1 billion+ at that time.
