Recently, a Dutch neobank called Bunq, which calls itself the second-largest challenger bank in the EU, published its report for Q4 2022, reporting its first quarterly profits. The bank managed to generate a profit of 2.3 million EUR, before taxes, during the last quarter of last year.
In its recent press release, Binq said that it managed to reach structural profitability. Now, the increase in profits will significantly improve its growth and expansion efforts. Interestingly enough, this new profitability came a full year after the bank — originally established in 2012 — managed to break even for he first time in December 2021.
Bunq financial report
Apart from pointing out its new achievement, Bunq also disclosed some additional details, such as the fact that it saw a net fee income go up by 37% between the months of September and December of 2022, compared to the same period in 2021. Back then, the bank saw a net fee income of around 23.1 million EUR.
The bank also saw a 64% increase when it comes to user deposits, totaling in 1.8 billion euros in the last quarter of 2022. In comparison, deposits in Q4 2021 were significantly lower, sitting at 1.1 billion EUR. However, the deposits in a year before that were only 813 million EUR, meaning that Bunq saw consecutive increases in user deposits in Q4 for at least three years in a row.
The founder and CEO of the neobank, Ali Niknam, commented on the bank’s performance, stating that his company uses a service-oriented business model which has proven profitable only 10 years after the bank was founded. He founded it after managing to secure the first European banking permit in more than 35 years. He was also the bank’s sole investor for nearly a decade.
Fintech firms had a hard time in 2022
Things finally changed for Bunq in 2021, but until that time, he financed the challenger bank personally, using approximately 98.7 million EUR over the course of the first nine years of its existence.
Then, in July 2021, the bank held a Series A funding round that was extremely successful, resulting in 193 million EUR raised. The round was led by Pollen Street Capital — a private equity company from the UK. The fund was described as the largest series A round ever secured by a fintech firm in Europe.
However, while the company may have performed well in Q4 2022, the period before this quarter was a different story. The harsh market conditions, primarily for fintech firms, have forced many to file for bankruptcy, or exit the industry. Several US startups similar to Bunq ended up doing so, such as Fast and Nirvana Money. In Nirvana’s case, the company packed up only 22 days after its launch.
The situation was not much better in European nations. Germany-based Planetly also had to shut down, and so did UK-based Dozens. Even Volt Bank from Australia saw the same thing happen to it. However, Bunq managed to survive, and now, it appears that it might yet thrive.