Monzo has announced it 2024 financial results, revealing the first full-year pre-tax profit. The company also confirmed that it is in the early stages of expanding into the wider European market through a new base in Ireland.
The news comes shortly after UK-based neobank raised two huge rounds of funding, starting with $430m (£340m) in March, followed by another $190m last month at a $5.2bn valuation. A significant portion of this funding is intended to spearhead its expansion into the US market, which it has been trying to crack for a few years. Last October, the company appointed new CEO for its US operations, head of global product poaching for the Block cash app; Conor Walshto lead the state.
However, we now know that Monzo is finally planning to push markets closer to home as well, as the company is eyeing a “new portal” in Ireland — that would mean a new office in Dublin, though it hasn’t put a timetable on that plan .
Development
Monzo hit profitability for the first time in its first two months last yeara milestone driven by it loan product and the UK high interest rates. This trend continued for the rest of the financial year, with the company now reporting pre-tax profits of £15.4m. compares with a full-year loss of £119m for 2022 and a loss of £116m for 2023. Monzo also reported that its revenue rose 250% to £880m last year.
In the report, Monzo chairman Gary Hoffman acknowledges that an expected drop in interest rates could weigh on its performance over the next 12 months, pointing to “external uncertainties” that could “create volatility” for the banking sector in total.
“The UK has just emerged from a technical recession, economic growth has slowed significantly and growth in the UK economy is expected to remain slow even as interest rates begin to gradually decline,” Hoffman notes. “While these risks could impact our performance and plans, I believe we are in a strong position to not just withstand these potential headwinds, but to continue to thrive in the face of them.”
All in all, it’s been pretty positive news for neobanks lately, with Monzo’s UK rival Revolut last year posting its first full year of profitability. Brazil’s Nubank was also on the upswing, with its valuation soaring to an all-time high of $58bn this year – this followed a shift from a net loss of $9m in 2022 in net profits of $1 billion last year.
Monzo, for its part, has also seen its customer base grow by more than 2.3 million to 9.7 million, which includes 400,000 business customers. The company said it expects to increase its customer base to 11 million next year.
