Zopa Group PLC: H1 2025 Trading Update

Note: the following trading update is unaudited.  

Today, Zopa Group PLC[1] has provided an update on its consolidated financial performance for H1 2025.

Key Highlights

·      Entered everyday banking through Biscuit, our new flagship current account product, which has reached over 100k customers  

·      Serving 1.5 million customers across all products, with 1 in 4 customers now holding more than one product with us

·      Raised £80m in Additional Tier 1 in May from existing and new investors to support a period of accelerating growth

·      Cost-to-income ratio[2] reduced to 37.5%, a market-leading ratio relative to high street banks and our closest fintech peers

·      Tripled profitability² to £20.7m in H1 2025 compared to the same period last year, supported by £3.4bn in gross loans and £5.4bn in retail deposits

·      Continued focus on responsible lending and use of advanced AI models for underwriting, successfully delivering stable credit performance despite an uncertain outlook

·      Announcement of our new office in Manchester as well as the move of our existing London office to Canary Wharf, reflecting our ongoing investment in innovation and talent

·      In motor finance, the Supreme Court judgement did not change our approach of not recognising a financial provision at this stage

Group Income Statement

Group Balance Sheet

Presentation of Group Key Performance Indicators

Analysis of Credit Risk Exposure

Key Financial Commentary

·      Total revenue grew 23% year-on-year due to continued growth in our customer base and gross new lending. Note, our gross new lending metric excludes credit cards

·      Cost-to-income ratio reduced by a further ~260bps year-on-year as we continued to invest in technology and efficiencies across the business

·      Net interest margin, which includes all interest-bearing assets, fell by ~30bps, predominantly due to excess liquid assets earning less income as rates fell. Excluding this impact, our lending net interest margin (when focusing on lending assets only) increased by ~40bps

·      Cost of risk fell by ~30bps as we observed improvements in underlying credit performance across unsecured personal loans and credit cards

·      Retail deposits grew 16% year-on-year but have stabilised since 2024 year-end as we have not sought out additional deposits given our excess liquidity position. In H1, we maintained margins, reducing our cost of funding in line with base rate and benefitting from strong retention rates for our savings products. We continue to operate with significant excess savings and liquidity

·      Note, in our KPIs, we exclude share-based payments from certain metrics such as our cost-to-income ratio and profit before tax to better reflect underlying business performance

FCA Review of Motor Finance Commissions

On 1 August 2025 the Supreme Court issued a unanimous decision in the three linked motor finance appeal of Hopcraft, Johnson and Wrench. The Court confirmed that car dealers do not owe a fiduciary duty to customers when arranging motor finance. As a result, customers have no automatic right to redress where either the car dealer or the lender failed to adequately disclose the payment of commission by the lender to the car dealer. However, customers may still be able to pursue claims against lenders based on breaches of the Consumer Credit Act 1974 and FCA Rules. On 3 August, the FCA confirmed that it will publish a consultation in early October on a redress scheme which will cover how lenders should assess whether the relationship between the lender and the customer was unfair for the purposes of the FCA's scheme and if so, what compensation should be paid. The FCA anticipates that most customers will receive less than £950 (including interest) in compensation per agreement. Pending publication of the FCA consultation we are assessing our auto loan book against the factors to be used to determine unfairness, which were set out by the Supreme Court and which the FCA expects to adopt. We do not currently consider that any adjustment is required to our year-end 2024 assessment and thus have not recognised any financial provision.

Pillar 3 Disclosure

Our H1 2025 Pillar 3 Disclosure can be found at zopa.com/investor-information under the Pillar 3 section.

Contact

Press Office: [email protected]

Investor Relations: [email protected]

Important Disclaimer

The information and opinions in this update are provided as at the date it was made and will not be updated to reflect developments that may occur after its release. None of the Company, any member of its group or any of such persons' respective directors, officers, employees, agents, affiliates or advisers accepts any responsibility or liability for any loss arising (whether in negligence or otherwise) from any use of or reliance on this update or its contents.

The financial data in this update has not been audited. Neither the Company, any member of its group nor any of their respective officers, employees, agents or professional advisers makes any representation or warranty, express or implied, as to the accuracy, completeness or fairness of the information contained in this update, and no duty of care is owed by any of them in respect of such information.

Any forward-looking statements included in this update describe the Company's current expectations and projections in respect of the performance of its group and / or the markets. Such forward-looking statements reflect various assumptions by the management of the Company's group as of the date of this update, and are subject to significant business, economic and competitive risks, uncertainties and contingencies, many of which are unknown and beyond the control of the Company. Accordingly, there can be no assurance that such forward-looking statements will be realised. The actual results may vary from anticipated results, and such variations may be material. The Company, any member of its group and any of such persons' respective directors, officers, employees, agents, affiliates or advisers expressly disclaim responsibility for the accuracy of the opinions expressed in this update or the underlying assumptions, and any obligations or undertaking to release any update of, or additions or revisions to, any forward-looking statements in this update or any events, conditions or circumstances on which any such statement is based.

This update does not constitute or form part of a prospectus for or an offer to sell or an invitation to acquire shares or any other securities, assets or property in the Company or any member of its group whatsoever, in any jurisdiction. Neither the update nor any of its contents shall form the basis of or be relied upon in connection with any agreement which may at any time be entered into by the recipient or any other person. Any liability arising from this update will be governed by English law.

Zopa Group PLC, a financial holding company, is regulated by the Prudential Regulation Authority.