Monzo has posted its first full year of profit after more than doubling revenues.
It joins fellow digital banks Revolut and Starling in the black after surpassing 400,000 business accounts. It is closing on 10 million total customers.
Monzo, founded in 2015, reported a £15.4m pre-tax profit in the year to the end of March, compared to a £116.3m loss the year before. Revenues hit £880m.
The London FinTech – which offers overdrafts, unsecured personal loans and buy now, pay later credit card Monzo Flex – said its loan book had grown 84% to £1.4 billion.
However it raised its provisions for expected credit losses to £176.9m, up from £101.2m, which CFO James Davies blamed on “global unrest, inflation and [high] interest rates… all of these factors increase the financial pressure on our customers’ disposable incomes and the risk they’re unable to repay us”.
“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,” said CEO TS Anil.
“This was a landmark year of record growth for Monzo.”
Monzo, which earlier this year raised £500m in a funding round – valuing the company at £4bn – now plans to open a hub in Dublin ahead of expansion into Europe. It is also eyeing a second launch in the United States after the first one was aborted.
“We’re a rare company that has delivered scale, growth and profitability. We have the right amount of capital to go after the opportunity ahead of us,” added Anil.