Embedded banking provider ClearBank turned a profit on a monthly basis for the first time in October on annual revenues of £45.3m.
ClearBank provides the underlying tech for real-time payment clearing on behalf of other corporates. The London-based firm claims it is the UK’s first clearing bank in more than 250 years, joining traditional banks such as Lloyds and the Royal Bank of Scotland.
Its move into the black is on a pre-tax basis and comes from its currently unaudited annual results for 2022. If it goes on to achieve profitability on an annual basis it will join a small but growing club of profitable digital challenger banks, which includes OakNorth, Starling and Zopa.
The UK fintech said it is now looking to expand its services outside of the UK to other markets such as the US and Europe, starting in the Netherlands next year. ClearBank is also preparing an M&A strategy as part of this expansion.
Charles McManus, CEO of ClearBank, said: “With a licensed clearing and embedded banking platform that is scaling rapidly, we expect to build on the success of 2021, and our accomplishments thus far in 2022, ahead of expansion into Europe in 2023 and the US soon after.”
Before moving into profit, ClearBank raised £175m in a funding round in March.
ClearBank is used by notable fintechs Coinbase, eToro and London-based business bank Tide, who are among its 17.5m bank accounts that combined have a balance of £3bn at the Bank of England.
McManus added: “In the last few years, we have seen the market shift from agency banking services to BaaS and now embedded banking driven by the demand from institutions and increasingly brands to integrate sophisticated and regulated financial services into their customer offerings.”