Wise: Another Guidance Lift on Strong Net Interest Income

Wise lifted its guidance for income growth for this fiscal year, which closes at the end of March, after posting another trading update with a strong net interest income contribution. Guidance now stands at 42% to 44% versus the previous 33% to 38%. We raise our fair value estimate to GBX 560 per share from GBX 550 previously. We believe that the boost from net interest earned on customers’ cash balances will be largely transitory. First, Wise is looking to return about 80% of the increase income generated through higher interest rates back to customers in various ways. Second, interest rates in its core markets are set to be cut as early as this year.