Australian buy now, pay later (BNPL) firm Zip posted a wider annual loss on Thursday (Aug 25), signalling lacklustre outlook for fintech firms in the wake of soaring inflation.

BNPL operators, particularly, have seen their valuations collapse in recent times as reduced customer spending and rising interest rates have squeezed their margins and pushed the firms’ funding costs higher.

Shares of Zip ended a volatile session 2.1 per cent lower after climbing up to 8.8 per cent earlier in the day.

Loss from ordinary activities after income tax attributable stood at A$1.11 billion (S$1.1 billion) for the year ended Jun 30, compared with a loss of A$678.1 million last year.

The company, which had earlier said it was reviewing the goodwill against its newly acquired US and European businesses, on Thursday recorded an A$821.1 million impairment charge for the year.

Zip, which made several global acquisitions after a pandemic-drivem boom in BNPL businesses, had last month dumped a buyout of US rival Sezzle. REUTERS

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