Wise Reports Decline in Profit Amid Shift to US Listing

Wise, the UK-based money transfer firm, reported a significant decline in profit during the first half of the year, coinciding with its decision to move its primary listing to New York. The company recorded a 13 percent reduction in pre-tax profit, amounting to £254.6 million. Despite this setback, Wise experienced substantial growth in customer numbers and transaction volumes.

The firm’s marketing investment surged by 59 percent, reaching £57 million, while technology investments rose by 18 percent, totaling £144 million. As part of its expansion strategy, Wise announced plans to hire over 1,000 new employees to strengthen its operational capacity.

Strategic Shift to the US Market

In a statement following the release of the half-year report, Wise’s Chief Financial Officer, Emanuel Thomas, explained the rationale behind the shift. He stated, “While we are extremely happy to be in London and our main operations and management are here in London, we consider that the US is offering us a larger liquidity with a larger investors community.” Thomas emphasized the importance of dual listing, highlighting that it allows Wise to engage with the largest and deepest financial markets in the US.

This strategic move has raised eyebrows in the City of London, where officials had hoped that Wise would pursue a listing on the FTSE 100, which would have provided a significant boost to the London stock market. The company’s intentions have also dealt a blow to the aspirations of UK Chancellor Rachel Reeves, who envisioned a fintech-driven revival of the London stock market.

Regulatory Challenges and Future Prospects

Amid these changes, Wise reported a penalty of $4.2 million due to anti-money laundering failures, stemming from a routine examination by US regulators between July 2022 and September 2023. This incident highlights the regulatory complexities that fintech firms face as they expand internationally.

In light of its new direction, Wise remains committed to strengthening its presence in both London and New York, aiming to leverage the diverse opportunities presented by the varying financial landscapes. The company’s focus on enhancing its visibility and establishing partnerships in the US markets underscores its ambition to position itself as a leading player in the global fintech arena.

As Wise navigates these challenges and opportunities, it will be essential to monitor its progress and the broader implications for the fintech landscape in both the UK and the US.