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British digital bank Monzo has announced its first annual profit on Monday, a key achievement ahead of its planned IPO.
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Monzo, the British digital bank, has reported its first annual profit, marking a significant milestone as it prepares for an upcoming initial public offering. Since launching in 2015, the mobile app-based bank has grown to 9.7 million customers, though turning that popularity into profit has been a challenge until now.
Image Source: Breaking News
For the fiscal year ending in March 2024, Monzo announced a pretax profit of GBP 15.4 million (USD 19.7M), a stark turnaround from the GBP 116.3 million (USD 148.9M) loss recorded the previous year. This financial achievement is largely attributed to the bank’s expanded offerings in lending and savings products, which helped to more than double its revenue to GBP 514.4 million (USD 658M) from GBP 214.5 million (USD 274M).
In March, Monzo also secured GBP 340 million (USD 435M) in new funding from a round led by Alphabet-owned CapitalG, which valued the company at £4 billion. Monzo’s CEO, TS Anil, has stated the company’s objective to go public.
Despite these gains, the bank’s aggressive push into lending—including buy-now-pay-later products—has its costs. Provisions for potential loan defaults nearly doubled to GBP 204 million (USD 264M), up from GBP 106 million (USD 135M).
Monzo is not only advancing financially but also geographically; it’s making a renewed effort to penetrate the lucrative U.S. market with a new leadership team, following an unsuccessful attempt in 2021. Additionally, the company is setting up operations in Dublin as a precursor to further expansion into other European markets.
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