Challenger bank and former peer-to-peer lender Zopa has reported its first profit less than two years after gaining a full banking licence.
The financial technology firm has followed in the footsteps of Starling and OakNorth to become the latest - and one of the few - British digital banks to have broken even.
Having only been granted a full banking licence in the summer of 2020 as it sought to diversify its services and compete with larger financial institutions, this also makes it one of the quickest online banks to reach profitability.




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Leader: 'Hitting profitability in just 21 months is a testament to our unique model that meets customer needs by focusing on how they borrow and save,' said Zopa CEO Jaidev Janardana

In a statement, the firm said: 'Sadly, over the last few years, customer trust in P2P investing has been damaged by a small number of businesses whose approach led to material losses for customers investing in those platforms.
'Linked to this, the changing regulation in the sector has made it challenging to grow and remain commercially viable.'
The group is now focusing on growing its banking business, whose products range from personal loans to car finance and fixed-rate savings accounts, and launching an initial public offering later this year.




To help achieve this, the company raised ?220million from investors in a funding round that was led by Japanese conglomerate Softbank and included hedge funds Davidson Kempner and Chimera Capital.
Following this fundraise, London-based Zopa became the newest British fintech giant to achieve 'unicorn' status - a privately-held firm worth at least $1billion. 
Jaidev Janardana, the group's chief executive, said: 'The past year has been a highly successful one for Zopa as we've exceeded our targets across new and existing products and raised $300million led by Softbank to fuel our accelerated growth.
'Hitting profitability in just 21 months is a testament to our unique model that meets customer needs by focusing on how they borrow and save - the two things with the most impact on finances.
'Today's news makes Zopa one of the fastest digital banks to achieve profitability ever and reinforces our thesis on the importance of sustainable growth as a catalyst for accelerated product and market expansion.'





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