Business

COVID-19: Luigi Wewege discusses risks to the Global Banking System

Published

6 years ago

March 23, 2020

A well-known figure in private offshore banking shares his views with us on the potential impact of COVID-19 on the global banking system as well as current investor sentiment. Luigi Wewege, Senior Vice President and Head of Private Banking at Caye International Bank in Belize discussed the situation with reference to several scenarios that investors could and should anticipate.

Regarding liquidity and stress tests, Wewege says that “Overall, United States and European based banks have showed reasonable improvement since the last financial crisis around 2008 however Europeans in particular do remember what happened with bail-ins and bailouts so you do see a lot of investor concern with what the European Central Bank might do next.”

When asked about some of the biggest concerns facing investors, Luigi noted that “There has been huge inflows of capital into the USA during the Trump administration. But now, people are a bit concerned about how far FEMA measures will go. People who have put large portfolios in either the USA or Europe are rethinking whether their safe-haven decision was the correct one. The Fitch Ratings agency already warned that the Italian banking system may struggle to cope with the fallout of the Coronavirus – and yes, it was not in a particularly good shape even prior to this. You also have countries like Greece that risks sliding straight back into a deep recession. So overall, investors do feel uneasy about the EU and US right now.” He went on to explain the various indicators that were taken into consideration during February plus March 2020 and said “Bank shares in Europe and the United States saw a very sharp repricing and decline. Government bond yields are falling, with US corporate high yields shooting up. This all shows that investor confidence in the global financial system has been shaken.”

Elaborating more on the scenario in Europe, Wewege believes “With such a substantial socio-economic shock unfolding in front of us, the brightest of financial analysts find it hard to see how Banks in the most affected European countries can maintain good assets and earnings. If repayment of loans ceases in the case of many European families – toxic assets becomes a big risk to them very quickly.”

About IMF policies during these challenging times, Luigi says “In fairness, the International Monetary Fund acted quickly to help countries during the time of Ebola, but that was a much smaller issue than what we face today. We know that given the huge spike in uncertainty that some in the IMF are proposing that there is a consensus worldwide to have a common monetary policy – and that will hopefully prevent a scenario where some currencies end up being the losers in Black Swan events. Yet all these instruments have their limits and at some point, it will come right back to the question of liquidity. That’s precisely why so many middle income to HNWI’s have allocated a decent portion of their portfolios to offshore banks that do not face the same exposure and risk that European and USA based banks do.”

Wewege went on to explain common risks that each individual country may face in the immediate future and aftermath of COVID-19: “A reduction in revenue and productivity may affect many countries – it is already doing so with disrupted supply chains and right now more borders are shutting. Then we have crippled public health systems in Europe who will need to consume a lot of public funds/stimulus in order to continue. Then off course there is one word that scares just about every European country and US state: Tourism. It is an important sector that is showing early signs of major strain that will likely continue for many more months. All these risks add up and will cause great strain on the global economy for the duration of 2020 and possibly even into 2021.”

On the ongoing appeal for offshore banking, Luigi says “Investors from all over the world gained a lot of respect for jurisdictions, like ours in Belize, where our banks were largely untouched by the 2008 financial recession. And yes – they certainly remember what happened to some large banks in Europe and the USA at the time and thus feel the writing is on the wall, whether it is indeed the case or not. Although we cannot predict accurately what the state of the global banking system will hold especially in Western countries, we can see a clear shift towards diversification and the start of more deposit inflow at offshore financial institutions like ours in Belize.”

Sound off:

Some may argue that the Dodd-Frank law that was passed in 2010 rendered the United States a less of a risk today than it was around 2008 and doomsayers who closely watch the Italian, French and Greek economies may have a point that the worst is still to come. Ultimately, these are very challenging times and to some extent, unchartered territory for the global financial system dealing with the Coronavirus pandemic.

Business

Inside the $4.3B Quarter: What’s Fueling Black Banx’s Record Revenues

Published

15 hours ago

January 16, 2026

Matthew Wiles

Every quarter brings fresh headlines in fintech, but few make the kind of impact achieved by Black Banx in Q2 2025. The Toronto-based global digital banking group, founded by Michael Gastauer, reported an extraordinary USD 4.3 billion in revenue and a record USD 1.6 billion in pre-tax profit, while improving its cost-to-income ratio to 63%.

These results not only highlight the company’s operational efficiency but also mark a pivotal moment in its journey from challenger to global leader. The big question is: what’s fueling such impressive financial performance?

Customer Growth as the Core Driver

One of the clearest engines of revenue growth is Black Banx’s expanding customer base. By Q2 2025, the platform had reached 84 million clients worldwide, up from 69 million at the end of 2024. This 15 million net gain in six months demonstrates both the attractiveness of its services and the scalability of its model.

Unlike traditional banks, which rely heavily on branch expansion, Black Banx leverages digital-first onboarding that allows customers to open accounts within minutes using just a smartphone. This approach is especially effective in regions underserved by legacy institutions, where access to affordable financial tools is in high demand.

More customers don’t just mean higher transaction volumes—they generate a compounding effect where network size, brand trust, and service adoption reinforce one another.

Real-Time Payments and Cross-Border Solutions

A major contributor to Q2 revenues is the platform’s real-time payments infrastructure. Black Banx enables instant cross-border transfers across its 28 supported fiat currencies and multiple cryptocurrencies, helping both individuals and businesses bypass the traditional bottlenecks of international banking.

For freelancers, SMEs, and multinational clients, this means faster liquidity, reduced foreign exchange costs, and simplified global operations. The demand for real-time financial services is growing rapidly—Juniper Research projects global real-time payments turnover to hit USD 58 trillion by 2028—and Black Banx is strategically positioned to capture a significant share of this market.

Crypto Integration as a Revenue Stream

Another key revenue driver is crypto integration. While many traditional institutions remain hesitant, Black Banx embraced digital assets early and has built infrastructure to support Bitcoin, Ethereum, and the Lightning Network. In Q2 2025, 20% of all transactions on the platform were crypto-based, reflecting strong customer appetite for hybrid banking services that bridge fiat and digital assets.

Revenue comes not only from transaction fees but also from value-added services like crypto-to-fiat conversion, staking yields (4–12% APY), and blockchain-enabled payments. For customers in markets with unstable currencies, these services act as a financial lifeline, further expanding the platform’s relevance.

AI-Powered Efficiency and Risk Management

Record revenues would be less impressive if costs ballooned at the same rate. But Black Banx has proven adept at balancing growth with efficiency. Its cost-to-income ratio improved to 63% in Q2, down from 69% a year earlier, thanks to heavy reliance on AI-powered automation.

AI now drives fraud detection, compliance, and customer onboarding—areas where traditional banks often struggle with cost inefficiencies. By automating these processes, Black Banx can process millions of transactions securely while maintaining profitability at scale. This level of efficiency is rare in fintech, where high growth often comes at the expense of margins.

Regional Expansion and Untapped Markets

Geography also plays a role in fueling revenues. Much of the Q2 growth came from Africa, South Asia, and Latin America—regions where demand for mobile-first banking continues to soar. In 2024 alone, Black Banx reported a 32% increase in SME clients from the Middle East and Africa, signaling the strength of its positioning in underserved markets.

By extending services to populations previously excluded from formal banking—migrant workers, rural communities, and small businesses—Black Banx taps into vast pools of latent demand. The strategy proves that financial inclusion and profitability are not mutually exclusive but mutually reinforcing.

Diversified Revenue Streams

Another factor behind Q2’s record revenues is Black Banx’s diversified business model. Income is not tied to a single service but spread across multiple streams, including:

Transaction fees from cross-border transfers and payments.
Crypto trading and exchange services.
Premium account features for high-net-worth clients.
Corporate services for SMEs and international businesses.

This diversification insulates the company against volatility in any single segment, creating stable revenue growth even in shifting market conditions.

Michael Gastauer’s Strategic Blueprint

Behind these results is Michael Gastauer’s long-term strategy: scale aggressively but with efficiency, innovation, and inclusion at the core. His vision has always been to create a borderless financial ecosystem, and Q2 2025’s performance is evidence that this vision is not only achievable but sustainable.

By balancing mass-market accessibility with premium features, and by blending fiat with digital assets, Gastauer has positioned Black Banx as a category-defining player in global finance.

The Road Ahead: Toward 100 Million Clients

Looking forward, the company’s goal of reaching 100 million customers by the end of 2025 will likely be the next catalyst for revenue growth. More customers mean more transactions, more data insights, and more opportunities to refine and expand its service offering.

If current momentum holds, the USD 4.3 billion quarterly revenue milestone could be just the beginning of an even larger growth story. The challenge will be ensuring systems scale securely while maintaining trust in an environment where privacy and compliance are paramount.

A Record That Signals More to Come

Black Banx’s Q2 2025 performance—USD 4.3 billion in revenue, USD 1.6 billion in pre-tax profit, 84 million clients worldwide, and a lean 63% cost-to-income ratio—is more than a financial milestone. It is a signal of how the future of banking is being rewritten by platforms that are borderless, crypto-inclusive, and data-driven.

What fueled this record-breaking quarter is not one innovation but a combination of strategies—scalable onboarding, real-time payments, crypto integration, AI efficiency, and expansion into underserved regions. Together, they form a model that doesn’t just challenge traditional banking but actively builds the foundation for global dominance.

For Black Banx, the road ahead is clear: the $4.3 billion quarter is not an endpoint but a launchpad for even greater scale and profitability.