International fintech giant coming to South Africa

Shares of Wise jumped the most in more than seven months after the money-transfer firm gave an upbeat earnings guidance and said it’s on track to shift its primary listing to the US in the first half of this year.

The London-listed fintech reported an underlying income of £424.4 million ($570 million) in the three months through December, which exceeded the £412 million average estimate compiled by Bloomberg. Continued customer growth fueled the gains.

The firm is targeting a profit-before-tax margin of 13% to 16% in the medium term, and expects it to be at the top end of the range in the current financial year. “We remain on track to meet our guidance,” Kristo Käärmann, co-founder and chief executive officer said in a statement Tuesday. 

Shares rose as much as 13% in early London trading, the biggest intraday gain since June last year.

Jefferies said strong customer growth and performance of Wise’s Platform were “very encouraging.” “Investments into price, onboarding capacity and marketing are finally paying off,” the firm’s analysts Hannes Leitner and Charles Brennan wrote in a note.

Wise had applied to be a directly regulated bank in the US last year after announcing plans to shift its main stock market listing from London to the US.

While it awaits a decision from the US Office of Comptroller of the Currency on its national trust bank charter application, CEO Käärmann said a listing there “will further increase our profile in the US” as it seeks to partner with more than 4,000 banks across the country.

Wise’s US business has grown to employ more than 750 staffers, including over 450 people in Austin. The fintech is now actively hiring dozens more staff, from engineers to key financial control roles.  

The firm’s cross-border revenue in the quarter was boosted 15% from a year earlier to £245.4 million, as the number of customers grew to almost 11 million from about 9 million from the same period a year ago.

More customers were holding money in their Wise accounts, with deposits increasing by 34% to £27.5 billion. About 75,000 customers in India joined its waiting list in a month, Wise said.

It secured a conditional license in South Africa, as the firm goes toe-to-toe in new markets with European rival Revolut. 

For the full year, Wise said it expects administrative expenses to be about £1 billion, which it said would include approximately £35 million of costs associated with the dual-listing.

The bulk of the increased spending so far this financial year has been tied to hiring, it added.