Monzo bank has provided an update on a regulatory probe into its historic compliance with money laundering regulations, first disclosed in 2021.
Monzo announced that the Financial Conduct Authority (FCA) had informed the bank it was no longer assessing criminal liability in the matter, although the investigation remains ongoing and the potential financial impact is still unknown.
CEO TS Anil stated that the company was cooperating with the watchdog on the investigation. The FCA declined to comment.
In addition, Monzo revealed that it is in the early stages of opening a Dublin office to facilitate its expansion across Europe. The bank is also making a second attempt at entering the lucrative U.S. market, following the hiring of a new leadership team for this venture. Monzo had previously abandoned a U.S. market attempt in 2021. In March, the company secured £340 million of new funding in a round led by Alphabet-owned fund CapitalG, valuing Monzo at £4 billion ($5.1 billion).
These developments came as Monzo reported its first annual profit on Monday, marking a milestone for the fast-growing British digital bank. Monzo reported a pretax profit of £15.4 million ($19.6 million) for the year ending March 2024, compared with a £116.3 million loss the previous year.
The mobile app-based bank has amassed 9.7 million customers in Britain since its launch in 2015 but had previously struggled to convert its popularity into profit. Monzo’s push into more lending and savings products has significantly boosted its revenue, which more than doubled to £514.4 million. However, the expanded lending, including buy-now-pay-later products, has come at some cost, with provisions for potential loan defaults almost doubling to £204 million.
Monzo provided no updates on its public listing plans. CEO TS Anil told reporters it was “heartening” to see IPO activity returning but said it was too early to discuss Monzo’s own plans.
By fLEXI tEAM
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