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UK fintech giant Monzo reported its second consecutive year of profitability on Monday after the neobank’s revenue climbed above £1bn for the first time.
The firm’s revenue increased 48 per cent to £1.2bn as it reported huge expansion across business arms amid rising expectations for a London flotation in the coming months.
Customer deposits jumped 48 per cent to £16.6bn, whilst total assets surged 41 per cent to £18.3bn.
The growth helped Monzo’s profit before tax over quadruple to £60.5m. The fintech recorded an adjusted profit – excluding the one-off £53.4m cost of a secondary share sale – of £113.9m.
This came despite total expenses rising 47 per cent to £687.4m. Monzo’s cost-to-income ratio, a key financial metric indicating its efficiency and profitability as a business, remained high at 73 per cent, reflective of its high growth pursuits.
The fintech reported a five per cent rise in headcount, rising to 3,934 from 3,736 last year.
Customers rise as credit losses fall
Bad loans provisions soared to £251.2m, rising from £204m last year. Meanwhile, credit loss expenses decreased to £152,595, down from 176,868 despite a 25 per cent rise in customers.
The company’s customer base swelled to 12.2m for the year, up from 9.8m.
This was on the back of a fleet of new product launches for the fintech, including Monzo Perks, Monzo Extra and Monzo Max, which helped fuel a 38 per cent in crease in fees and commission revenue to £329.2m.
Monzo has been the buzz of the City in recent weeks after reports it was gearing up for a blockbuster £6bn IPO.
The fintech has hotly being tipped for a London-listing with Government and London Stock Exchange officials courting the business in hopes for a boost to the embattled market.
Chief executive TS Anil said: “We’ve grown from a startup challenging the status quo, to a household name, a leading brand and the UK’s 7th largest bank by customer numbers.”
He said: “Our growth across the year is reinforced by the growing trust customers have in Monzo as they bring more and more of their financial lives to us.”
