The Wise (LSE: WISE) share price was up 12% at one point this morning (5 June) after the bank announced plans for a primary listing in the US during its FY24 results release.
The company will maintain a secondary listing in London but believes “a primary US listing would help us accelerate our mission and bring substantial strategic and capital market benefits,” said Kristo Kaarmann, co-founder and CEO of Wise.
“The UK is home to some of the best talent in the world in financial services and technology, and we will continue to invest in our presence here,” he added.
Wise growth
In the 2024/25 fiscal year, Wise emerged as the largest mover of institutional money in and out of Brazil and is now handling 12% of all cross-border transfers involving the Philippines.
Product innovation has played a key role in its growth, with new features like interest-earning accounts in Australia and Quick Pay for business invoicing. Strategic partnerships with major financial institutions, including Standard Chartered, Morgan Stanley and Itau, further bolstered its position.
Customer activity surged in the past year, with active customers up 22% and a 23% increase in cross-border volumes. Customer holdings grew by 44% compared to the previous year and revenue increased 15% year on year to £1.2bn.
Pre-tax profit rose by 17% to £564.8m, up from £481.4m in the previous year, highlighting the firm’s strong operational momentum.
What is Wise?
Formerly known as TransferWise, Wise has emerged as a significant player in the fintech industry since its inception in 2011. Founded by Estonians Taavet Hinrikus, Skype’s first employee, and Kristo Käärmann, a former Deloitte consultant, the company was born out of their frustrations with the high costs and lack of transparency in international money transfers.
Their solution was a peer-to-peer platform that allowed users to transfer money across borders at the real exchange rate, significantly undercutting traditional banks.
The company’s innovative approach quickly attracted attention and funding from notable figures such as PayPal co-founder Max Levchin and Virgin Group‘s Richard Branson. By 2020, it had reached a valuation of £3.7bn, testament to the increasing demand for cost-effective international money transfer solutions.
Investment thesis
Wise offers strong growth potential as a leading fintech innovator in cross-border payments, but still carries notable risks.
Regulatory changes are a key concern as it operates across multiple jurisdictions, threatening high compliance costs, currency volatility and integration difficulties. Additionally, it also faces stiff competition from traditional banks, fintechs and blockchain firms.
The planned shift to a US primary listing adds near-term uncertainty for UK investors. Despite robust financials and global expansion, Wise’s premium valuation leaves little room for disappointment. Investors should weigh long-term prospects against these risks, particularly in a sector where rapid disruption and regulatory oversight are ever-present.
Out of 17 analysts following the stock, 11 have Buy ratings, five Hold and four Sell. But overall, forecasts lean negative, with the average 12-month price target 4.9% lower than today’s price. Still, revenue is expected to reach £2.32bn by 2027, with earnings per share (EPS) expected to climb to 41p per share.
Negative forecasts aside, I think the US listing is a good move that will help boost the bank’s global position and profits. As such, I think it’s still worth considering even for UK-centric investors.
