UK online bank Monzo said it will use Ireland to access the European Union market, as it reported its first annual profit.
The company, which named Irishman Conor Walsh as the head of its US business last year, has begun the process of opening its EU base here, its chief executive TS Anil said.
“In Europe, Ireland will act as our gateway to European markets and we’re in the early stages of setting up an Irish office,” Mr Anil said in the company’s annual report published on Monday. “We believe every part of the world needs a Monzo so we’re focused on expanding our offering, building strategies to disrupt the US with a first-class leadership team in place.”
A company spokeswoman declined to comment further on Monzo’s plans for Ireland.
Mr Anil’s comments came as the neobank said it more than doubled its revenue last year, though it made provisions for bad loans worth more than a tenth of its lending book. Monzo has been one of the highest-profile online banks in the UK, where it is a competitor to the likes of Starling and Revolut. It has about 8.4 million customers and more than 300,000 business customers, according to its own stats.
The mobile bank posted a pretax profit of £15.4 million (€18.1 million) for the 13 months through March compared with a £116 million loss a year earlier, with revenue jumping to £880 million.
The firm lent £1.4 billion to its customers during the year – a rise of 84 per cent – while also increasing its credit loss expenses 75 per cent to £177 million. Overdrafts and its Monzo Flex credit drove the rise. The bank said it has “regularly taken steps to update our credit underwriting in light of loss experiences”.
The firm now has 9.7 million customers and deposits grew by about 88 per cent to £11.2 billion during the year. The digital bank moved into investments in September when it launched a product with BlackRock. Its growth efforts meant staffing expenses rose 47 per cent during the year.
“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 seventh-largest bank in the UK by customer numbers,” Mr Anil said.
Monzo raised a total $610 million from investors in recent months, valuing the British start-up at $5.2 billion. Investors include Alphabet’s independent growth fund CapitalG and Chinese venture capital firm HongShan Capital, as well as new investors such as London-based venture capital firm Hedosophia.
The company named Irishman Conor Walsh to lead its operations in the US in October. It first attempted to set up a US operation in 2019 but withdrew its application for a US banking licence after more than two years of negotiations with regulators, in 2021. At that time, US regulators had reportedly told the company its application would not be approved.
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: Bloomberg
