In the black: Monzo reported a pre-tax profit of £15.4m for the year to the end of March
Monzo has reported its first annual profit since launching nine years ago as it works towards a stock market listing.
Chief executive TS Anil said it was a ‘landmark year of record growth’ for the digital bank, which has nearly 10million customers.
Monzo reported a pre-tax profit of £15.4million for the year to the end of March, compared with a pre-tax loss of £116.3million the previous year.
This was despite its credit loss expenses soaring by over £75million to £176.9million because of significant growth in its borrowing portfolio and customers falling into arrears.
The group has significantly expanded into lending, particularly the UK buy now pay later market, where its market share has skyrocketed to about 20 per cent, according to a recent report by credit technology firm Render.
Demand for its ‘Flex’ credit card, which allows people to spread the cost of payments interest-free over three months, helped the firm’s total gross lending surge by 84 per cent to £1.4billion.
It also contributed to Monzo’s turnover more than doubling from £355.6million to £880million.
The digital bank, which burst onto the banking scene in 2015, said it was benefiting from having more customers depositing more cash in their accounts.
Customer deposits soared by 88 per cent to £11.2billion. Like other UK banks, it also benefited from generating more income from higher interest rates, which have climbed in recent years in a bid to control the rising cost of living.
On the back of its profitability, Monzo said it is in the early stages of opening an office in Dublin, which it described as a ‘gateway’ to help it expand across Europe.
The bank, which is the UK’s seventh largest, is also preparing to launch in the US.
Anil has previously said the challenger bank’s aim is to list on the stock market – with London seen as a possible destination.
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