Latest news with #TSAnil
Times
3 days ago
- Business
- Times
Monzo boss plays down IPO rumours after jump in profits
In 2015 Monzo, or Mondo as it was then called, was little more than a twinkle in the eye of its founder Tom Blomfield. Aged 30 at the time, Blomfield could boast just 500 holders of his 'hot coral pink' payment cards and the backing of a single venture capital firm, Passion Capital. His claim at the time, 'We're trying to be the Facebook for banking', sounded ambitious if not downright deluded. But fast-forward ten years and Monzo has come a long way and on a spectacular growth trajectory not so dissimilar to Mark Zuckerberg's. Results on Monday showed customers at the digital bank rising by 2.4 million to more than 12 million in the year to March. Revenues were up by 48 per cent to £1.2 billion. Deposits pushed through the £16 billion mark. Underlying profits grew eightfold to £114 million. Even after including the one-off cost of a scheme to allow staff to cash in share options in December, pre-tax profits were still up a healthy fourfold to £60.5 million. London-based Monzo claims to be Britain's seventh largest bank by customer numbers and the nation's biggest digital bank. It is also far more popular with customers than most of its incumbent branch-based rivals: the latest independent study by the Competition and Markets Authority scored it second for overall service quality, beating every other bank except Chase. Blomfield is long gone, having left in 2021 to farm alpacas and launch other ventures, but his successor TS Anil hailed the latest results as the product of 'bringing the best in tech together with the best in banking'. The standout growth engine last year was business banking, which grew its customer base by 49 per cent to 625,000 small business clients. One in six new business start-ups in the UK were now banking with Monzo, Anil said. Monzo is much more than the banking app with clever tools that helped customers to budget and share bills, which in the early days became the coolest way of paying, for millennials and Gen Zs. It has expanded into personal loans, contents insurance and even pensions in a joint venture with BlackRock. It has launched in the United States and is preparing a foray into the European Union, via Ireland. Not everything is going well. Like most other retail banks, Monzo reported a slimming in its net interest margin — the difference between deposit rates and lending rates — from 4.41 per cent to 4.09 per cent. Margins have been falling in the wake of base rate cuts. But Anil played down the hit, saying Monzo's success was built on volume growth and that it had other income streams including subscription services such as Monzo Perks, where customers pay a £7-a-month fee in return for benefits including railcards and free sausage rolls at Greggs. About 900,000 Monzo customers pay for subscription services. Another blemish in the latest results was the disclosure of possible failings in its anti-money laundering controls. An investigation by the Financial Conduct Authority was now 'at an advanced stage' and was 'likely to have a financial cost to Monzo', it disclosed. A flotation now sounds some way off. 'Honestly, an IPO is not something we're focused on right now,' Anil said. 'We're oriented entirely around scaling the business and taking it to greater heights.' Speculation that Monzo was heading for an imminent public listing had intensified after Morgan Stanley was used to introduce it to potential investors and it started recruiting to build an in-house investor relations team. Last month Emma Reynolds, the economic secretary to the Treasury, met Monzo executives to press the case for a London float. Anil, however, played down the IPO option on Monday, while adding, 'We believe it [Monzo] would make a great public company one day.' There is no urgency. Last year Monzo raised £500 million from institutional investors and is now capital-accretive. Its backers include Alphabet, the owner of Google, and Tencent, the Chinese video games and social media company. It also has a fan club of early users who bought shares through crowdfunding platforms. A secondary share sale in December, enabling staff to cash in share options, valued the company at £4.5 billion, it has said. Putting that claim to the test through a flotation is, it seems, still some way off. Rise of the Monzonauts Monzo and its 2,500 employees, whom it dubs Monzonauts, have been on an epic journey over the past ten years. With an £18 billion balance sheet and a £4.5 billion valuation (by its own measure), the company is no longer a tiddler in any sense. Through the offering of helpful and imaginative app-based budgeting and spending tools, it has won over millions of loyal customers. It has started to cross-sell them other services, whether mortgage-broking or pension-finding or contents insurance. It has also managed to bulldoze its way into small business banking, catering not just to sole traders but in some cases to companies with dozens of staff, and grabbing market share from the incumbent banks. It has already shown itself capable of persuading consumers to make it their main bank, into which at least half their salaries are paid. Primary account holders account for 33 per cent of the total and it is growing. There are, however, three tests still to come before Monzo can be said to have fully come of age. The first is finding a home for all those deposits, most of which get parked at the Bank of England. Monzo needs to get more fully into the lending business, though its caution till now suits its capital-light model. The second is exporting the formula overseas. Monzo is for now still tiny in the US and only just thinking about the EU, though it has established an office in Dublin. There's no guarantee the Monzo product will travel, though there is plenty of room for growth still in the UK, of course. The third is the test of a full-blooded recession. The 2020/21 downturn was hugely softened by government support for households and business. Monzo's credit-scoring techniques, and the potential for a blowout in borrower defaults, have yet to be assessed. In their first decade the Monzonauts have proved themselves creative and painstaking innovators but they have not yet been fully tested.
Yahoo
3 days ago
- Business
- Yahoo
Monzo profit soars as British challenger bank boosts lending
The British lender now has more than 12 million customers, a rise of 2.4 million during the year, while deposits grew 48% to GBP16.6 billion. Monzo Bank said its profit quadrupled last year with a burgeoning loan book lifting revenue, as the mobile bank works toward an eventual stock market debut. The British lender posted a pretax profit of GBP60.4 million ($105.22 million) for the year through March compared to GBP15.4 million profit in the 13 months prior, with revenue jumping to GBP1.2 billion from GBP880 million. The 10-year-old firm lent GBP1.9 billion to its customers — a rise of 36% from a year ago. '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,' Chief Executive Officer TS Anil said in a statement. He added that Monzo now has more than 12 million customers, a rise of 2.4 million during the year, while deposits grew 48% to GBP16.6 billion. A third of customers are using Monzo as their primary bank, and the company has launched individual savings accounts to encourage customers to bring in even more of their money. Monzo is working with Morgan Stanley to arrange meetings with potential investors for an initial public offering that could take place as early as the first half of next year, Sky News reported last month. Anil told Bloomberg TV that Monzo 'will make a good public company one day', yet it was too early to talk about the details of any IPO plans. A listing could value Monzo at more than GBP6 billion, according to Sky. The firm's customers are mostly in the UK. For years, Monzo has been looking to expand in the US, and last year hired Conor Walsh, a former executive at Block's Cash App, to lead its business in the US. The firm also opened a Dublin office last year, marking its official European expansion. Last year, Monzo allowed employees to offload some of their stock in a secondary share sale that valued the company at US$5.9 billion. The bank booked a GBP53.4 million one-time cost linked to the share sale in its latest accounts. Investors in this round included Alphabet's independent growth fund Capital G, as well as new investors such as London-based venture capital firm Hedosophia. Chart: Bloomberg See Also: Click here to stay updated with the Latest Business & Investment News in Singapore MariBank launches invite-only access to global bonds via Pimco GIS Income Fund Trust Bank to launch TrustInvest in 2025 The digital banks that make a profit Read more stories about where the money flows, and analysis of the biggest market stories from Singapore and around the World Get in-depth insights from our expert contributors, and dive into financial and economic trends Follow the market issue situation with our daily updates Or want more Lifestyle and Passion stories? Click here
Daily Mail
3 days ago
- Business
- Daily Mail
Digital bank Monzo hits £1bn as UK market grows but boss talks down London listing
Monzo revenues have topped £1billion for the first time following a boom in customer numbers. Chief executive TS Anil said the digital bank was 'just getting started' after sales grew 48 per cent to £1.2billion over the 12 months to March 31. Monzo welcomed 2.4m customers, bringing its total base to more than 12m clients – making it the UK's largest digital bank and the seventh-largest overall. Profits hit £60.5million, some four times higher than a year earlier, as the fintech firm reaped the rewards of new paid subscription plans. About 1m customers pay for a subscription, which offers perks with retailers including Greggs and Vue, as well as phone and travel insurance. Anil however, dashed hopes that the bank – founded in 2015 and which employs 3,700 staff – will list on the London stock market anytime soon. 'He said such a move 'is not something we're focused on right now'.
Forbes
4 days ago
- Business
- Forbes
Digital Bank Monzo Says ‘Too Early' For IPO Talk As Profit Soars 300%
TS Anil, CEO of Monzo, speaking at the Web Summit in Lisbon, Portugal, on November 2, 2022. Monzo reported sharply higher profits on Monday that will inevitably fuel further speculation about an initial public offering, but the digital bank wants to downplay those expectations. Monzo's CEO TS Anil told reporters that it was 'way too early' to talk about IPO plans. 'We believe we'll 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,' he said. Monzo is said to be working with Morgan Stanley to arrange meetings with potential investors for an IPO that could take place as early as the first half of next year, according to a report by Sky News. Citing people close to the company, Sky said the timing, size and location of the listing are still to be decided and will depend on market conditions in London and New York. The London-based bank saw a more than fourfold increase in profits last year. Monzo reported a pretax profit of £60.5 million ($81.8 million) for the year ended March 31, compared to £13.9 million a year earlier. The firm's revenue jumped 48% to £1.2 billion, which Anil said is a testament to Monzo's diversifying business model. He pointed out that three of the bank's revenue streams – deposits, transactions and lending – each contribute more than £200 million in annual revenues. 'Our growth across FY2025 is reinforced by the growing trust customers have in Monzo as they bring more and more of their financial lives to us,' Anil said. Customer deposits rose to £16.6 billion, a 48% increase from a year earlier. A third of its customers now use Monzo as their primary bank. Monzo also signed up another 2.4 million people to its platform last year, bringing its customer base to more than 12 million. The digital bank said its lending portfolio swelled to £1.9 billion, an increase of 36% from a year ago, but it managed to reduce its expected credit losses through better risk management. Monzo, which was founded a decade ago, has grown to become the U.K.'s seventh-largest bank. The majority of its customers are in Britain, but the firm is also aiming to expand overseas. Last year, Monzo hired former Stripe executive Michael Carney to lead its push into the European market. In 2023, the bank appointed Conor Walsh, a former executive at Block's Cash App, to lead its expansion in the U.S. market. Monzo is one of a host of digital banks, often described as neobanks or challenger banks, that emerged over the past decade and managed to take market share from Britain's biggest lenders. Monzo, which was originally named Mondo until it faced a trademark challenge, began as a 'scrappy startup' issuing prepaid debit cards in 2015 before obtaining a bank license two years later. Since then, Monzo has grown to become one of Britain's most valuable fintech companies. Last year, Monzo was valued at £4.5 billion ($5.9 billion) in a secondary share sale that allowed employees to sell some of their stock. Investors who participated in the round included StepStone Group and Singapore's sovereign wealth fund GIC.
Yahoo
4 days ago
- Business
- Yahoo
Monzo annual profit surges as paying subscribers boost digital bank
Monzo has revealed surging annual profits as the digital bank attracted new customers and grew income from its paid subscription plans. The company reported a pre-tax profit of £60.5 million for the year to the end of March – more than four-fold the £13.9 million generated the prior year. Last year, Monzo's employees sold £109 million worth of shares as part of a staff share sale that saw the bank's valuation rise to £4.5 billion. Excluding the financial impact of the sale – which cost the group about £53 million in expenses – its pre-tax profit surged eight-fold to £113.9 million. The bank, which was founded a decade ago, cheered its first annual profit last year having grown to become the UK's seventh-largest bank with more than 12 million customers. It said 2.4 million new customers joined over the past year, with deposits growing by 48% to £16.6 billion. The digital bank has also been cashing in on new paid subscription plans, which offer perks with retailers such as Vue and Greggs, enhanced budgeting features, and phone and travel insurance. About one million customers paid for a subscription last year, with the group's fee and commission income increasing 38% to £329 million, it said. TS Anil, Monzo's chief executive, said the bank was 'just getting started', adding: 'By bringing the best of technology and banking together and remaining customer-obsessed, we're seeing accelerating growth and momentum and unprecedented customer love.'
