Despite some Wise headwinds recently, the company’s stock jumped after disclosing an uptick in earnings and revenue.
British online money transfer fintech company Wise’s (LON:WISE) stock jumped nearly 18% on Tuesday in reaction to the company’s earnings hike. In a recent statement, the London-based fintech noted that its pre-tax profit had tripled to £146.5 million ($186.5 million). The company also reported that earnings per share tripled to 11.53 pence.
According to data from MarketWatch, Wise stock has gained 6.58% in the past five days and 16.64% in one month. Since January, the WISE has gained 11.09%, up 97.6% in the last year. As of 1:49pm GMT, WISE was trading at £624.40 after rising nearly 19% on the day. The company’s previous close was £525.40.
Wise reported an increase in customer growth of 34%, totaling 10 million as of March 31, 2023. The company’s turnover was also £104.5 billion after rising by 37%. In terms of revenue, Wise was £846.1m, up 51% from £559.9m a year earlier. Wise’s total income, helped by higher customer deposits, jumped 73% year-on-year, to £964.2m.
Overall, most of Wise’s profits came from the Bank of England (BoE)-initiated interest rate hike. Last week, the Bank of England raised interest rates for the 13th consecutive time, adding 50 basis points. The Monetary Policy Committee voted 7-2 in favor of the addition, increasing the Bank of England’s base rate to 5%.
The main bank has been constantly raising interest rates to fight rising inflation. In May, the annual consumer price index (CPI) rose 8.7%, higher than the 8.4% expected by economists.
Records wise stocks rally despite headwinds
The jump in Wise shares is a silver lining amid the company’s woes. Last year, the Abu Dhabi Global Market Financial Services Regulatory Authority (FSRA) issued fined A wise $360,000 for breaking anti-money laundering laws.
In a statement, the FSRA said Wise Nuqud, a local subsidiary of Wise, had not established and operated an anti-money laundering framework sufficient to comply with the agency’s requirements. Although the FSRA said it had not found any actual cases of money laundering, it identified inadequacy and failure to put in place systems and controls guidelines.
UK tax authorities added to Wise’s woes last year after CEO and co-founder Christo Karman was accused of tax evasion. HM Revenue and Customs fined the chief executive £365,651, roughly $495,000 at the time, for filing his personal tax returns late for the 2017/18 tax year. A company spokesperson confirmed that Karman had paid the fine and added the required demurrage.
In a recent conversation with BBC Radio, Carman appeared to play down the incident. According to him:
“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.”
However, Karman said the Financial Conduct Authority (FCA) is investigating the incident. The outcome of the FCA investigation could affect his position as CEO if he is found guilty.
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Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify cryptocurrency stories down to the bare essentials so that anyone anywhere can understand without much background knowledge. When not in the depths of cryptocurrency stories, Tolo enjoys music, loves to sing, and is a movie lover.