British neobank Monzo is planning further expansion as it marks its first profitable year.
The company’s annual report, released Monday (June 3), showed its profit before tax at $144 million (£15.4 million) compared to a loss of £116.3m in the prior year.
“This was a landmark year of record growth for Monzo,” CEO TS Anil said in a news release. “We surpassed 9m personal customers, 400,000 business customers, launched game-changing new products, closed a £500m capital raise and, as planned, reported our first year of profitability.”
That capital raise was the largest one in Europe last year, the company said, valuing Monzo at $5.2 billion.
In addition, the report said, Monzo added 2.3 million customers in the year, including 200,000 new business customers, and is now the seventh-largest bank in Great Britain. Customer deposits grew by 88% to $14.2 billion (£11.2 billion).
Now, Monzo is planning to expand into Europe using Ireland as its “gateway,” with the company in the beginning stages of opening an office in Dublin. Monzo says it also plans to introduce a pensions product this year and expand its mortgage feature.
The company is already planning to expand into the U.S., last year naming former Cash App Head of Product Conor Walsh to serve as its American CEO.
Monzo is not seeking a banking license in the U.S., however, with Anil telling CNBC last month that the company is focused on making sure its services in America can keep up with banking titans such as Citibank and J.P. Morgan.
“The necessary conditions for the U.S. for us is getting the product right,” Anil said. “That’s what we’re spending our time and effort on there.”
As PYMNTS wrote at the time, the company, along with other digital banks like Chime and Starling, “stand out in the neobank sector, as they achieved profitability and as valuation rounds point to what might be a sanguine outlook for those players.”
At the same time, PYMNTS added, there are still some factors that indicate that sustained profitability could be an uphill battle for a sector where, among dozens of players, only a handful have gone into the black.
In addition, PYMNTS Intelligence research has found that just 9% of consumers use FinTechs as their primary banks, while 47% of consumers reported some reluctance in using these digital-only players.
