London Stock Market Set to Capitalise on US Political Uncertainty

The chief executive of British digital bank Zopa suggests London’s stock market could benefit from mounting political instability in the United States. Jaidev Janardana, who leads the £1 billion-valued fintech unicorn, indicates that American political uncertainty might enhance London’s appeal for companies considering public listings.

Speaking candidly about Zopa’s own listing plans, Janardana expressed reservations about choosing New York as a listing destination, citing concerns over unpredictable tax policies and tariff regimes under potential Trump administration policies. The UK’s political stability and robust legal framework present increasingly attractive features for prospective listings.

The digital bank, which transformed from a peer-to-peer lender into a fully-fledged bank in 2020, now serves more than 1.3 million customers and holds £5 billion in deposits. Zopa achieved a significant milestone in 2023, posting its first pre-tax profit of £15.8 million, driven by increased net interest income.

Recent developments have strengthened Zopa’s position, with the bank securing £68 million in fresh funding led by AP Moller Holding in December. The company maintains it won’t require additional funding until at least 2026, demonstrating strong financial health despite current market conditions.

Addressing broader economic concerns, Janardana noted a slowdown in borrowing appetite since the year’s start, attributing this partly to increased employer national insurance contributions. The bank chief maintains an optimistic outlook regarding potential US tariffs, suggesting they might actually prove deflationary for the UK by making alternative trade relationships more competitive.

While market conditions have delayed immediate IPO plans, Janardana projects a more favourable environment emerging either late this year or early next. The success of UK listings, he emphasises, ultimately depends on companies delivering on their promises to investors.