Online money transfer firm Wise’s shares soared nearly 18% Tuesday as the company reported a spike in profits thanks to rising interest income.
The company said in a statement to the stock market that its profit before tax tripled to £146.5 million ($186.5 million). Earnings per share also more than tripled, to 11.53 pence.
That was as the company saw customer growth of 34%, with 10 million total users by March 31, 2023, and volumes increased 37% to £104.5 billion.
Wise was trading at about £6.18 at around midday London time, up almost 18% on the day.
Wise benefited from surging interest rates, which last week were raised by the Bank of England to 5% as policymakers grapple with persistently high inflation.
Like other fintechs, Wise has been able to accrue income from interest on funds sitting in customer accounts.
Monzo and Starling Bank recently reported their own respective profitability milestones, citing increased income from lending.
Wise said Tuesday its revenues grew 51% to £846.1 million, from £559.9 million the year prior.
Overall income reported by the firm rose to £964.2 million, up 73% year-on-year. This was boosted by a surge in the amount of funds deposited by customers.
Still, Wise has been grappling with a number of less positive developments.
The company’s CEO Kristo Kaarmann last year became the subject of an investigation by Her Majesty’s Revenue and Customs over a £365,651 tax bill he failed to pay on time.
The news is significant as it could lead to serious ramifications for Kaarmann’s position if he is found to have breached U.K. tax laws.
“The FCA [Financial Conduct Authority] is still conducting the investigation and it’s taking a while. I find this is a bit unfortunate but we’ll have to wait until we hear what they conclude,” Kaarmann said in an interview with BBC Radio Tuesday.
“It has really not much to do with the business that we’re running, it was a personal mistake. I was really late with my taxes a long time ago and I paid the fines.”
Wise was also the subject of a $360,000 fine by regulators in Abu Dhabi over failings in its anti-money laundering controls.
This issue has since been “resolved,” Kaarmann told the BBC.
Kaarmann earlier this year announced that he plans to take a three-month sabbatical between September and December to spend time with his baby.
Harsh Sinha, the company’s chief technology officer, is set to assume his duties as CEO in the interim. This has led to speculation from some investors that Sinha may step up into the CEO role permanently. Wise has not itself indicated this will be the case.