Monzo Digital Bank Sees A 2.3x Revenue Growth In Fy2023
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Monzo, a digital bank based in the United Kingdom, has reported a 2.3 times growth in revenue for the 2023 financial year. The digital bank has also moved into profitability for the first time ever in the first two months of its new financial period.
Monzo reports a 2.3x growth in revenue in FY2023
The UK neobank also secured a positive note in the report that was published for 2023. The move triggered a notable increase in customer numbers that reached 7.4 million, while the deposits increased by 34% to £6.06 billion. On the other hand, the revenue reported by the company during the year came in at £355.6 million, which was a significant increase from the £154.2 million reported in 2022.
The main reason behind the significant growth in revenue reported by the company is the strong venture into the business banking industry. Moreover, there was also an increase in the number of premium accounts that are paying fees.
While the revenue reported significant growth, the costs remained significantly high. The expenses reported by the company during the period came in at 42%, while there was also a 10% increase in headcount, and there were also investments in marketing and technology.
The bank has also reported a £101.2 million charge in the expected credit losses. The charge was a massive increase from the £14 million that was reported in the 2022 financial year. The bank also tripled the amount of money that was lent to customers during the current financial year, with the figure increasing by £500.9 million to £759.7 million.
Monzo reports a significant increase in lending
The report has also said that there was an increase in customer borrowing on overdrafts and the Monzo Flex product. The borrowing figures for these two products increased to £921.9M during the period. The bank also noted that there was no significant increase in the number of customers that were reporting arrears or having a challenging time repaying loans because of the uncertain economic climate.
“This increase in lending has driven the majority of the credit loss expense. We’ve not yet seen an increase in customers going into arrears or struggling to pay us back due to the cost of living crisis and current economic uncertainty, but we’ve adjusted our models to take into account higher expectations of loss,” the report said.
The digital bank is yet to make a solid recovery on the year-end losses. The losses reported by the company in 2023 came in at £116 million, which was a drop from the £119 million reported in 2022.
The chairman of Monzo, Gary Hoffman, commented on the development saying that the losses reported by the company during the period remained significantly high during the year, which was expected as it continued to make investments and pursue growth. Despite the increased cost, Hoffman noted that the company had reported benefits from the investment in 2023 amid a growth in revenues.
