UK challenger Zopa scores £15.8m pre-tax profit for 2023 as IPO nears
UK challenger bank Zopa appears to be inching ever closer to a stock market debut with a recorded £15.8 million pre-tax profit for FY 2023.
Zopa bags profit after 2022’s £26m loss
According to its latest financial statement, the bank logged a total revenue of £226 million last year, making a 29.7% climb “despite the challenging macroeconomic environment” it adds.
The results indicate a positive shift in Zopa’s financial standing after it previously generated a £26 million loss in 2022.
It attributes the turn in its latest performance to a 14.9% increase in deposits to £3.4 billion against a promising 27.3% rise in loans on balance, currently standing at £2.7 billion.
Zopa says it experienced a 38.7% drop in its cost-to-income ratio as a result of its technology, while its products grew by just under a third to now serve in excess of one million customers.
The results reflect a positive year for the unicorn challenger, which kicked off 2023 by raising £75 million from investors in February when it also sealed the deal to purchase the e-commerce credit solutions provider DivideBuy.
Zopa leveraged its first acquisition to cultivate a high-capacity buy now, pay later service that enabled purchases between £250 and £30,000 to be spread across multiple instalments.
This followed the appointments of former Leeds Building Society director Kate Erb to chief operating officer (COO), and Peter Donlon, a former Moonpig chief, to chief technology officer (CTO) in June.
Three months later, it doubled down on its fundraising efforts yet again, bagging another £75 million in Tier 2 capital, and is now thought to be levelling £530 million in total funding.
Getting ready to float?
On the surface, these results, alongside wider developments in its offering, present all the hallmarks of a bank preparing for an IPO.
Yet while Zopa reportedly told Sky News back in 2022 that it was toying with the idea of a stock market floatation, it has recently shown reluctance on the issue.
CEO Jaidev Janardana told the FT this week that he’d “be surprised” if any UK fintechs make their stock market debut in London this year, a comment that hinted at the timeline of the bank’s own plans for the future.
The bank announced its profitability during this year’s Innovate Finance Global Summit (IFGS), which brought to attention the dedication needed to successfully execute a public offering amid the UK’s tense investor landscape.
