Despite facing some headwinds recently, the company’s stock has soared after revealing soaring profits and earnings.

Shares of British fintech online money transfer company Wise (LON: WISE) rose about 18% on Tuesday after rising company profits. The London-based fintech firm said in a recent statement that its pre-tax profit had tripled to £146.5 million ($186.5 million). The company also reported earnings per share tripled to 11.53p.

Wise stock is up 6.58% over the past five days and 16.64% over the past month, according to MarketWatch data. WISE has risen 11.09% since January and has risen a whopping 97.6% over the past year. At 1:49pm BST, WISE was trading at £624.40 after gaining nearly 19% on the day. The company’s previous closing price was £525.40.

Wise recorded a 34% increase in customer numbers, reaching a total of 10 million as of March 31, 2023. Also, the company’s trading volume increased by 37% to reach £104.5 billion. Wise sales reached £846.1m, up 51% from £559.9m the previous year. Wise’s total revenue increased by 73% year-on-year (YoY) to a high of £964.2m, supported by a surge in customer deposits.

In general, much of Wise’s gains came from interest rate hikes initiated by the Bank of England (BoE). The Bank of England raised interest rates for the 13th time in a row last week, adding 50 basis points. The Monetary Policy Committee voted 7-2 to raise the central bank’s base rate to 5%.

Top banks consistently raise interest rates to combat rising inflation. The annual consumer price index (CPI) rose 8.7% in May, beating economists’ expectations of 8.4%.

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The surge in Wise shares is a silver lining in the company’s troubles. Last year, the Abu Dhabi Global Markets Financial Services Regulatory Authority (FSRA) fined $360,000 wise for anti-money laundering (AML) violations.

In a statement, the FSRA said Wise’s local subsidiary, Wise Nuqud, did not build and operate an AML framework sufficient to meet the agency’s requirements. The FSRA said it did not find any actual cases of money laundering, but identified deficiencies and failures in setting up guideline systems and controls.

UK tax authorities compounded Wise’s troubles last year by accusing CEO and co-founder Christo Kalman of tax evasion. Her Majesty’s Revenue and Customs has fined the CEO £365,651, about $495,000 at the time, for late filing of personal tax returns for the 2017/2018 tax year. A company spokesperson confirmed that Kalman had paid the fine and added penalties for late filing.

In a recent conversation with BBC Radio, Mr Kalman seemed to downplay the incident. According to him:

“It has very little to do with the business we run. It was a personal mistake.

Nevertheless, Kalman said the Financial Conduct Authority (FCA) is investigating the incident. If the FCA’s investigation results in a guilty verdict, it could affect his position as CEO.

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Tol Ajiboe

Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to explain the cryptocurrency story down to the basics so that anyone, anywhere can understand it without a lot of background knowledge. When not digging into cryptocurrencies, Tolu enjoys music, loves to sing, and is an avid movie buff.

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