ClearBank Considers US Expansion After Hitting Profitability

Embedded banking firm ClearBank is reportedly planning to expand into Europe and the U.S.

Charles McManus, the British firm’s CEO, told Bloomberg News Thursday (April 4) that the company has applied for a banking license in the Netherlands, and is considering launching in the U.S. by 2026, possibly through an acquisition.

For the moment, the company is “not in need of going to capital markets” for funding, McManus said, with an initial public offering (IPO) more likely once ClearBank is in a position to expand into places like the United Arab Emirates or the Asia-Pacific region.

Bloomberg notes that ClearBank doubled its deposits last year to 6.1 billion pounds, which means it benefited from rising interest rates. It also saw a jump in their revenue from services like payment processing for other banks. ClearBank does not provide lending from its deposit book, the report said, but rather makes money from processing fees.

The report came as the company reported its first annual profit, making 18.4 million pounds ($23.1 million) for 2023, following a loss of 7.1 million pounds the previous year.

As noted here last year, the company recorded a 20% jump in inflows during the crisis triggered by the collapse of Silicon Valley Bank. ClearBank also saw its payment volumes jump 54% year over year, coming to 108 million for 2023.

“This was driven by the significant expansion of the bank’s client base, the number of bank accounts held by them and their end-customers, and an acceleration in open banking transactions,” ClearBank said in a news release.

PYMNTS examined the rise of open banking earlier this week in an interview with Shadi Saifan, vice president of engineering at NCR Voyix.

For it to take off in the U.S., he said, banks need to build an open, larger ecosystem amid the ongoing digital transformation, and embrace disruptions, often from FinTechs.

“A single financial service or a single financial institution may not be able to offer everything that your consumer really would like to enjoy and would make a difference to them,” said Saifan, who added that the wider financial services ecosystem has and must include FinTech companies that are innovating, generally speaking, faster than traditional banks.