Monzo also reported its first annual profit after more than doubling its revenue last year, though it made provisions for bad loans worth more than a tenth of its lending book. The pretax profit of £15.4m (€18.04m) for the 13 months through March compared to £116m (€136m) loss a year earlier, with revenue jumping to £880m (€1bn).
Monzo CEO TS Anil has previously said the firm’s aim is to become a publicly listed company. “In Europe, Ireland will act as our gateway to European markets and we’re in the early stages of setting up an Irish office,” he said. The company is also making a second tilt at the lucrative US market after hiring a new leadership team for the venture, after abandoning a previous attempt in 2021.
“We think the US market is crying out for a banking product like Monzo; something that gives Americans a way of pulling in all the different services they have today to make life easier for themselves.”
In March, Monzo secured £340m (€398m) of new funding in a round led by Alphabet-owned fund CapitalG, valuing the company at £4bn (€4.7bn).
The firm lent £1.4 billion to its customers during the year — a rise of 84% — while also increasing its credit loss expenses 75% to £177 million. Overdrafts and its Monzo Flex credit drove the rise. The bank said it’s “regularly taken steps to update our credit underwriting in light of loss experiences.”
The digital bank moved into investments in September when it launched a product with BlackRock. “In nine short years, Monzo has come from nowhere to a position where one in six UK adults has a Monzo account and we’re now the 7th largest bank in the UK by customer numbers,” Anil said.
Monzo is the latest London-headquartered challenger bank to move into profitability after years of rapid growth and investment. Starling Bank reported its second profitable year in 2023, while Revolut made its first annual profit in 2021.
Additional reporting Reuters and Bloomberg
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Publish date : 2024-06-03 09:51:00
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