Monzo: Digital bank narrows losses as it chases fintech rivals toward profitability
Monzo narrowed its losses last year and has now swung into the black as it chased after its rivals in the race to reach steady profitability.
The coral-carded lender, which has become the UK’s most high-profile fintech firms, reported a net loss of £116.3m for the year to February, compared to a loss of £119m in the same period last year.
Revenues at the London-based challenger bank more than doubled to £355.6m as the bank notched a 34 per cent rise in deposits to £6bn in the 12 month window.
Monzo chief TS Anil said it had been a year of “phenomenal growth” for the firm.
“We’re a stand-out player in banking and tech – and we’re firing on all cylinders to achieve our ambitions,” he said in a statement.
London-based Monzo was founded by Tom Blomfield in 2015 and has swelled to become Britain’s seventh largest lender by customers with a base of some 7.4m active users. Over 1.6m customers signed up to the firm in the year to February.
However the bank has lagged some of its peers in the race to reach steady profitability. Starling Bank, founded by Blomfield’s former business partner Anne Boden, last week reported record pre-tax profits of £195m for the year to the end of March 2023, a six fold increase on the previous year’s figure of £32m.
Monzo has also been one of the most hotly discussed listings targets in London but chief Anil would not commit to an eventual float in the capital when quizzed by reporters.
“It’s too early. We’ll do the work well before we need to make a decision,” Anil said when asked by Reuters where Monzo could float.
“We will make a great public company one day,” Anil added. “If at some point there’s the right reason to raise capital [from investors] to invest even more, we will.”
The lack of commitment from Anil may unsettle stock exchange officials who have been on the offensive to boost the appeal of London to tech and fintech firms.
His comments follow warning shots from Monzo founder Tom Blomfield last week who said London’s listing problem was “very real” as he quit London for San Francisco.
“The US capital markets at IPO stage are much, much deeper and much more accepting of high growth tech companies. I don’t think that is going to change anytime soon,” he told Bloomberg.