Wise logo displayed on smartphone screen.
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online money transfer company Wise’s Shares of the company soared nearly 18% on Tuesday as profits surged on higher interest income.
In a statement to the stock market, the company said its pre-tax profit tripled to 146.5 million pounds ($186.5 million). Earnings per share also more than tripled to 11.53p.
As of March 31, 2023, the company’s clientele grew by 34%, bringing its total number of users to 10 million, and transaction volume increased by 37% to £104.5 billion.
Wise was trading at around £6.18 around midday London time, up almost 18% on the day.
Wise is benefiting from soaring interest rates, which the Bank of England raised to 5 percent last week in response to persistently high inflation.
Like other fintech companies, Wise earns income from interest on funds held in customer accounts.
Monzo and Starling Bank recently reported their respective profit milestones, saying loan income increased.
Wise said on Tuesday its revenue rose 51% to £846.1 million from £559.9 million last year.
The company reported total revenue rose to £964.2 million, up 73% year-on-year. This was driven by a surge in the amount of funds deposited by customers.
Still, Wise has been grappling with some less positive developments.
Chief executive Kristo Kaarmann was investigated by HMRC last year for failing to pay £365,651 in tax on time.
The news is significant because Kaman could have serious repercussions for his position if he is found to have breached UK tax law.
“The FCA (Financial Conduct Authority) is still investigating and it’s going to take a while. I find that a bit unfortunate, but we have to wait for their conclusions,” Kaman told BBC radio on Tuesday.
“It really doesn’t have much to do with the business we run, it’s a personal error. I was late paying my taxes a long time ago and I paid a penalty.”
Wise was also fined $360,000 by Abu Dhabi regulators for lapses in anti-money laundering controls.
Kalman told the BBC the issue had been “solved”.
Kaman announced earlier this year that he planned to take a three-month vacation between September and December to spend time with his children.
Harsh Sinha, the company’s chief technology officer, will temporarily assume the CEO role. That has led some investors to speculate that Sinha may retain the CEO role permanently. Wise himself has not indicated that this will be the case.