The platform turned a £1.5m profit in 2017 on the back of significant revenue growth.
Despite worsening consumer credit conditions, peer-to-peer lender Zopa managed to return to full year profitability in 2017 for the first time in several years.
The world’s original P2P platform made a profit after tax of £1.5m in 2017. This number factors in only its peer-to-peer business activities.
The company announced in late 2016 that it would seek a banking licence. Chief executive Jaidev Janardana recently hinted to AltFi that Zopa may receive that licence later this year.
The return to profitability was driven by year-on-year revenue growth of 40 per cent, up from £33.3m in 2016 to £46.5m in 2017. The company lost £5.8m in 2016.
The recovery was also the product of a focus on automation, according to a statement from Zopa. The firm references the fact that it can now let customers know within a few seconds whether they’re pre-approved for a loan (leveraging Open Banking data), and the fact that it launched a number of initiatives to reach new customer segments during the period.
Zopa lent significantly more in 2017 than in the previous year, growing volumes by 43 per cent from £690m to £985m. This growth comes despite worsening consumer credit conditions – an ominous climate that prompted Zopa to tighten its credit criteria in August 2017, after seeing losses spike.
2017 was also an important year for Zopa in that it finally received full authorisation as a peer-to-peer lender, paving the way for the launch of its Innovative Finance ISA.
“2017 was a landmark for us. We’re proud to see the company’s efforts reflected in our record lending figures, profitability and strong customer growth. It’s a big step towards Zopa’s vision to be the best place for customers’ money. We’ve invested significantly in technology, in our proprietary back office infrastructure, and in our people, all of which have helped Zopa to continue to scale and grow sustainably,” said Zopa boss Janardana, in a statement.
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