Digital lender Zopa, headquartered in London, is currently on track to double profits and to the growth of annual revenue by more than a third in 2024.
The statement of the mentioned content was made by a chief executive officer of the specified virtual financial institution Jaidev Janardana during a conversation with media representatives last Wednesday, November 13. The optimistic vision regarding the performance of the digital lender is due to the fact that there is currently an increase in consumer demand for its banking services provided in an online environment.
The revenue of the virtual financial institution in the last year was fixed at 222 million pounds ($281.7 million). Currently, the digital lender expects the mentioned figure to exceed 300 million pounds in 2024. It is worth noting that the corresponding result, which is not yet a documented fact and belongs to the category of probabilities, means an increase in the revenue of the virtual bank by 35% year-on-year.
Forecasts regarding the financial performance of Zopa in 2024 are based on unaudited internal figures.
The digital lender also expects its pre-tax profits to double in the current year. In 2023, the corresponding figure was fixed at 15.8 million pounds.
Zopa is a regulated online bank. This financial institution operating in the virtual space is backed by the Japanese business giant SoftBank. Next year, the digital lender plans to venture into the world of current accounts. Currently, the virtual bank is focused more on new products.
Nowadays, a digital financial institution offers its customers credit cards, personal loans, and savings accounts through a mobile app. It is worth noting that other lenders that do not have a physical presence network have a similar product line. In this case, it is appropriate to mention such digital financial institutions as Monzo and Revolut.
Jaidev Janardana stated that the business is doing really well. According to him, in the current year, the digital lender fulfilled or exceeded plans across all metrics. The head of the virtual bank also stated that high indicators are associated with a gradual improvement in sentiment in the economic system of the United Kingdom. Zopa operates exclusively in the mentioned space.
Commenting on the current macroeconomic conditions in the United Kingdom, Jaidev Janardana said that consumers are feeling a little slightly pain this year than in 2023. He also noted that the last few years have been difficult.
Jaidev Janardana stated that the market is still tight. According to him, fintech offerings that typically provide higher savings rates than high-street banks are becoming increasingly important in such times. Similar offers are available in the Zopa product line. Jaidev Janardana stated that the proposition has become more relevant, and while it is tight for customers, the digital financial institution has had to be much more constrained in terms of who a virtual bank can lend to.
According to the head of Zopa, an important priority for the going forward business is the product. The digital lender nowadays is developing a current account product that will allow customers to spend and manage their money more easily. In this case, consumers will be offered a functional solution similar to that of mainstream banking providers such as HSBC and Barclays, and fintech upstars like Monzo.
Jaidev Janardana stated that there is more that the digital lender believes that the consumer can have in the current account space. According to him, the virtual financial institution expects that next year it will launch the current account with the general public.
Jaidev Janardana stated that consumers can expect a slick experience from Zopa’s current account offering, including the ability to view and manage multiple account bank accounts from one interface and access to competitive savings rates.
Zopa is one of many fintech companies that have been viewed as potential candidates for an initial public offering (IPO) of shares. About two years ago, the digital lender announced its intention to go public. Over time, the virtual bank decided to postpone the implementation of this intention to a later date. This decision was related to the circumstances of the external environment. Against the background of the increase in interest rates by central banks as part of the fight against inflation, the shares of technology companies turned out to be on a downward trajectory. In the context of the relevant state of affairs in 2022 in the IPO market, such a situation has formed, which in a symbolic sense can be described as paralysis.
Jaidev Janardana stated that he does not consider a public listing as an immediate priority. At the same time, the head of Zopa stated that there are signs of a more favorable IPO market in the United States next year. Also, in his opinion, Europe will become more open to listings in 2026. During his conversation with the media, he did not say when the digital lender would become public. According to him, the virtual bank is lucky to have supportive and long-term shareholders who support future growth as well.
Last year, Zopa made two senior hires, appointing Peter Donlon, ex-chief technology officer at online card retailer Moonpig, as its own CFO. The digital bank also hired Kate Erb, a chartered accountant from KPMG, as its chief operating officer.
The virtual financial institution raised $300 million as part of the funding round led by SoftBank in 2021. It is worth noting that the mentioned Japanese business giant is an active technology investor.
Last time, Zopa was valued by investors at $1 billion.
Currently, the digital banks sector is on an intensive development trajectory. Virtual lenders can offer innovative solutions and also provide access to services to those groups of consumers who face various difficulties when trying to interact with traditional financial institutions. The number of digital banks is likely to increase. It is worth noting that traditional lenders are also starting to launch services and products related to the digital banking category.
As we have reported earlier, Zopa Snaps Up DivideBuy.
