The UK's Zopa Bank has narrowed losses after tax to £26 million from a deficit of £34.2 million in full year 2021, achieving a pre-tax profit of £10.1 million.
The bank says that in 2022, it grew total operating income by 131% to £151m and expanded its customer base to approximately 868,000. Total money deposited with the bank exceeded £2.9bn, representing 202% year-on-year growth.
The main engine of this growth is attrubuted to Zopa's Smart Saver product, a 'hybrid' (easy access / notice) savings account that allows customers to flexibly lock their money in exchange for a higher interest rate within pots.
Presenting the results, CEO Jaidev Janardana says the business is on track to achieve full-year profitability in 2023. "Our technology enables us to achieve this growth efficiently, thus bringing our cost to income ratio down to 40%," he says. "Our best-in-class underwriting models use cutting edge AI and machine learning algorithms that have been optimised over the last eight years delivering stable and better than expected credit performance.
Having made its name as a P2P lending pioneer, Zopa pivoted two years ago to become a traditional bank. In January it made its first growth-focused acquisition, buying BNPL player DivideBuy from the proceeeds of a £75 million M&A warchest that was raised in January. The deal is expected to increase Zopa’s revenue by at least 20% in the next few years.
The firm also acquired a £41 million loan portfolio in March from an investor in its former P2P lending business for a cash consideration of £38 million.