Monzo: The rockstar fintech setting the City abuzz
Monzo has dominated City chatter in recent months with its hotly anticipated IPO, and now the fintech unicorn’s latest financial results indicate the talk is only going to get louder.
The UK fintech veteran broke another milestone in the last 12 months after topping £1bn in annual revenue.
Behind the surge in takings was a boost in new customer numbers as the neobank launched a new fleet of products.
Monzo recorded 12.2m customers for the 12 months ending 31 March, jumping 25 per cent from 9.8 million.
The firm cast their net wide in the last year, with the launch of Monzo Pensions – allowing users to manage and invest their retirement savings – and Monzo for Under 16s.
The offering for younger customers had over 180,000 in waitlist signups in its first week.
Lending surged 36 per cent to £1.9bn and deposits 48 per cent to £16.6bn.
Despite this, the ten-year-old business recorded a 10 per cent drop in impairment charges on bad loans to £153m, which Monzo said demonstrated its safe scaling of operations.
The latest reporting period marked the second full-year of profitability for Monzo, as it ballooned over 300 per cent to £60.5m. The neobank also recorded an adjusted profit – excluding the one-off £53.4m cost of a secondary share sale – of £113.9m.
City banking on Monzo IPO
Monzo is being eyed as a must-have public listing by top Treasury and London market officials.
The firm is one of a handful of fintech darlings the Treasury has held talks with in hopes of a London-listing.
Monzo called in Wall Street giant Morgan Stanley, as reported by Sky News, to help spearhead an IPO that would value it at more than £6bn. The investment bankers are expected to be formally hired in the coming months.
The listing location is still reported to be in the air, with rumours chief executive TS Anil is leaning towards a US float – whilst Monzo’s board is thought to prefer to IPO at home in London.
Anil shot down speculation of an IPO following the company’s annual results on Monday, telling reporters it was not a priority.
He said: “The honest answer is that, you know, we believe we’d make a great public company one day, and we’re well on the trajectory to doing that when we choose to, but it’s just not something we’re focused on right now.”
Paint the City coral
Monzo touted its “Best British Bank” accolade from Smart Money People in its annual report as well as its “Brand of the Year” title from the Marketing Society.
The firm picked the award up a year after launching a new brand campaign in May 2024.
The campaign helped Monzo carve out its own segment of the digital banking market from its well-regarded user experience through to its recognisable coral cards.
Branding looks to have paid dividends for the firm in a sector which has struggled to shake regulatory woes.
The Competition and Markets Authority (CMA) reprimanded Monzo in November 2024 for multiple “especially concerning” breaches of the Retail Banking Market Investigation Order 2017.
Breaches included publishing inaccurate surveys on service quality, failing to properly display the monthly maximum charge for current accounts and not publishing the representative loan rate for business banking, according to the CMA.
This came just a month after its neobank rival Starling was slapped with a £29m fine by the Financial Conduct Authority for regulatory failings.
But Monzo has managed to quickly curb any missteps recording more products and customers than ever and becoming the most downloaded UK banking app.
The growth trajectory straps Monzo up for its biggest step yet – a landmark leap that City officials hope will end with it painting the London Stock Exchange coral.