German Fintech May Soon Be More Valuable Than Deutsche Bank
German payments company Wirecard is fast approaching the market valuation of banking behemoth Deutsche Bank, capping a week in which investors snapped up shares in Europe’s biggest ever fintech public offering, according to Bloomberg.
Wirecard is hovering close to a record 158.10 euros in Frankfurt, with shares gaining for a 13th day, marking its longest rising streak since an initial public offering in October 2000. Its 19.4 billion-euro market valuation, just 470 million euros shy of Deutsche Bank’s, also makes it a candidate to join Germany’s DAX benchmark index of the 30 largest companies as early as September, when Deutsche Boerse conducts its regular index review.
The stock is benefiting from an extension of its partnership with Visa on payment solutions, announced on June 5, and the successful IPO of Dutch competitor Adyen, whose shares almost doubled in value on its first day of trading. “Wirecard is going deeper into an area that could have been of interest for established banks,” said Holger Schmidt, an analyst at Bankhaus Metzler in Frankfurt. “None of the big European lenders is active in this space and they all failed to recognize this long-term trend. This left the door open for non-financial institutions.”
For years, systems for processing payments in stores and online were controlled by major banks, credit card issuers and a litter of longstanding IT suppliers. Wirecard and Adyen are part of a new breed of fintech firms challenging this hegemony, creating more choices for consumers. Analysts covering Wirecard remain bullish despite a 68 percent rally this year, with 16 rating the stock a buy and 12 recommending hold. None advise selling the shares, which have overshot the average price target by around 12 percent.