Should we be worried about Kuda bank's financial performance?

Sep 26, 2022|Yomi Ajayi

Recently, an article published by TechCabal provided some insight into Kuda Bank’s alleged financial performance. The fintech raised $55 million to hit the half a billion ($500 million) valuation mark last year. The article was based on a financial report which flagged some concerns about the bank's performance.

The highlight of the now publicly available results was a 40x growth in 2021’s revenue of ₦3.2 billion, up from ₦72.7 million in 2020. 

Disclaimer: Kuda Bank is a private company, and the analysis here is based on the financial numbers published in this article, which the company has not publicly acknowledged.

 

Key takeaways:

  1. According to TechCabal, Kuda bank reported a 6x jump in net losses for 2021 to ₦6.1 billion, despite a 40x jump in revenues to ₦3.2 billion. 

  2. Kuda’s model as a startup involves an aggressive focus on growth at the expense of profitability as it tries to capture its target market.

  3. The same article places Kuda’s NPLs at 69% of its loan book. This reflects Nigeria's persistent challenges with lending. However, as Kuda continues to grow and tweak lending strategies, it could be on the path to profitability.

​​​​​

However, this revenue growth couldn’t cushion the 6x rise in the reported operating expenses of ₦7 billion from ₦0.94 billion in 2020. And so, its expenses, coupled with other costs, contributed to the neobank’s (bank without branches) ₦6.1 billion loss which was 6x higher than the ₦0.87 billion loss posted in 2020. 

Invest with Confidence, Operate with Precision.

Access economic and industry data & insight for global organisations.

Trusted by leading global organisations
subscriber
subscriber
subscriber
subscriber
subscriber
subscriber
subscriber

Related