Monzo has reported a 44% leap in its annual profits as the digital bank generated more from lending and cashed in on subscriptions. The bank, launched 11 years ago as a challenger to high street banking, said millions more customers joined in the past year.
Financial Performance
It reported a pre-tax profit of £87.3 million for the year to the end of March, up 44% on the £60.5 million made the year before. Total revenues jumped by 39% to £1.7 billion, partly driven by a 39% year-on-year increase in lending income. Monzo offers loans and overdrafts for individuals and businesses, as well as credit cards.
Subscription Growth
Monzo also has paid subscription plans for customers to upgrade their account and gain access to extra money management tools or perks with brands like Greggs and Vue. The bank said some 1.6 million customers paid for subscriptions, with the group’s fee and commission income increasing by 39% to £459 million.
Customer Base and Primary Banking
The bank’s total customer base has reached 15.2 million, making it the seventh largest in the UK by customer numbers. It has nonetheless been striving to get more of its customers to switch to using Monzo as their primary bank for day-to-day banking, including receiving their salary, to compete with traditional banking giants. It said that around half of its active customers use Monzo as their primary bank – the equivalent of about a third of all its customers.
Executive Pay
Meanwhile, the bank’s latest annual report revealed that the highest-paid director, understood to be former chief executive TS Anil, took home a pay packet worth £3.5 million last year. This was significantly less than the £12 million he earned the year before, when profits surged fourfold. Mr Anil stepped down as chief executive earlier this year and was replaced by former Google executive Diana Layfield.
CEO Statement
Ms Layfield said: “Millions of customers are choosing Monzo for more of their financial lives. We’re building on that momentum by delivering more products for personal and business customers, continuing to grow in the UK and bringing Monzo magic to Europe in a way that feels truly local from day one.”
