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Monzo posts first annual profit since 2015 launch

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'Heartening' to see IPO activity, but no update on plans -

CEO

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FCA probe continues but no longer assessing criminal

liability

(Adds CEO comments, further details and context throughout)

By Iain Withers

LONDON, June 3 (Reuters) - Monzo reported its first

annual profit on Monday in a milestone for the fast-growing

British digital bank and said it would open an office in Ireland

as it looks to expand into other European markets.

The mobile app-based bank has amassed 9.7 million customers

in Britain since its launch in 2015 but had previously found it

tough to translate its popularity into profit.

Monzo reported a pretax profit of 15.4 million pounds ($19.6

million) for the year to March 2024, compared with a 116.3

million pound loss the previous year.

It is one of several digital banks to spring up in Britain,

although the upstarts have struggled to break the dominance of

the country's Big Four - HSBC, Lloyds, Barclays and NatWest.

Monzo's push into more lending and savings products has

helped boost its revenue, which more than doubled to 514.4

million pounds.

But the expanded lending - including buy-now-pay-later

products - has come at some cost, with its provision for

potential loan defaults almost doubling to 204 million pounds.

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 its own

plans.

The bank provided an update on a regulatory probe into its

historic compliance with money laundering regulations, first

disclosed in 2021.

Monzo said it had been informed by the Financial Conduct

Authority (FCA) that it was no longer assessing criminal

liability in the matter, although an investigation is ongoing

and the potential financial impact is unknown.

Anil said the company was cooperating with the watchdog on

the investigation. The FCA declined to comment.

Monzo said it was in the early stages of opening a Dublin

office to pave the way for expansion across Europe.

The bank is also making a second tilt at the lucrative U.S.

market after hiring a new leadership team for the venture. It

had abandoned a previous attempt in 2021.

The company secured 340 million pounds of new funding in

March in a round led by Alphabet-owned fund CapitalG,

valuing Monzo at 4 billion pounds ($5.1 billion).

($1 = 0.7855 pounds)

(Reporting by Iain Withers

Editing by David Goodman, Kirsten Donovan, Sriraj Kalluvila)