Fintech & Ecommerce

Monzo Reports First Profitable Year

Neobank Monzo has recorded the first profitable year in its entire history, as a result of which this virtual lender, relying on positive financial indicators, is now planning to scale up its activities.

Monzo Reports First Profitable Year

On Monday, June 3, the mentioned digital financial institution, based in the United Kingdom, published an annual report that contains information on pre-tax profits of 15.4 million pounds ($19.6 million). In this case, it means the indicator recorded for the fiscal year ending March 31. It is worth noting that a year earlier, the digital lender faced a loss, the amount of which was around 116.3 million pounds.

Monzo’s revenue for the 2024 fiscal year was 880 million pounds. This indicator increased 2.5 times year-on-year.

The card spending of neobank’s customers for the 2024 financial year reached a level of 47.8 billion pounds. This indicator increased by 42% year-on-year.

TS Anil, CEO of the virtual bank, said that the last fiscal year was a period of record growth for Monzo. According to him, during this period, the base of personal customers of the digital lender surpassed the significant mark of 9 million people. The virtual bank also serves 400,000 business customers. Moreover, during the last fiscal year, the digital lender was able to raise capital for 500 million pounds and launched new products. The mentioned capital raising became the largest in Europe in 2023. After this round of financing, the virtual bank was valued at $5.2 billion.

Returning to the topic of the number of consumers of digital lender services, it is worth clarifying that over the past fiscal year, the customer base increased by 2.3 million people, including 200,000 business clients. Monzo is currently the seventh-largest financial institution in the United Kingdom. Deposits of virtual bank customers increased by 88% over the past financial year, amounting to $11.2 billion.

The digital lender currently has plans to expand its operations in Europe. In this case, Monzo intends to use Ireland as its so-called gateway. It is known that the virtual financial institution is currently at the initial stage of opening an office in Dublin. Also in 2024, the digital bank intends to introduce a pension product and expand its mortgage feature.

Moreover, a virtual financial institution has plans related to activities in the United States. Last year, Monzo appointed Conor Walsh, former head of the Cash App product unit, as its US CEO. It is worth noting that the digital lender does not intend to obtain a banking license in the United States. Last month, during a conversation with media representatives, TS Anil said that Monzo is focused on ensuring that its services in the United States meet the requirements of such titans of the local banking sector as Citibank and JPMorgan. According to him, for a virtual lender in the context of activities in the US, the most important task is to get the product right. TS Anil stated that neobank spends its time and effort on this goal.

Monzo, together with digital lenders such as Chime and Starling, stands out among other organizations in the category of virtual financial institutions, with the result of achieving profitability. Moreover, the mentioned neobanks, according to analysts, have positive prospects.

At the same time, sustainable profitability in general is likely to be a very difficult task for the digital lenders sector, as evidenced by the fact that only a small part of the players in this functional space demonstrate appropriate financial indicators.

It is worth noting that neobanks have not yet become for the consumer community what can be called a standard service provider, interaction with which is perceived as a natural practice. This statement is confirmed by the results of a special study conducted in the United States. In the mentioned country, only 9% of consumers of banking services prefer the offers of fintech sector players. Also, 47% of the clients of all financial institutions operating in the US stated a kind of prejudice, due to which they do not interact with digital lenders.

As we have reported earlier, Monzo Introduces Investments Powered by BlackRock.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.