Congratulations Monzo on profitability 
Looking forward to deep diving the report.
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This I’d love to know and I actually emailed the investor relations team about this earlier, asking the current share price
I maxxed out each round and would love to know what it’s worth and when they might IPO 
An investor update drops:
We’ve hit important milestones, sure, but they’re just milestones. There’s plenty of work to do still and we couldn’t be better positioned to go after the huge opportunities in front of us. We’re particularly
thrilled about the investment product we have in the works and what it will mean for customers wanting to grow their money. That’s all we’ll say about what’s coming up for now but stay tuned throughout the year for some exciting announcements.
Emphasis mine…
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A solid set of results, with most of the metrics moving in the right direction.
Like others, I would be interested in knowing more about the increase in bad/doubtful debt. I would expect losses to increase given the impact on living costs from high inflation and the increasing in total volume of lending. But is it an accounting reason that the costs of lending have jumped so much more than the volume of lending? Or are there certain types of lending which are showing greater losses than others?
Oh, and putting my accountant hat on; well done to the finance team for getting the accounts finalised and through audit within 3 months of year end, quicker than last year IIRC.
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My reading is that they just account for their maximum estimate of bad credit at the beginning of the agreement. Given that the report shows that Flex and overdraft lending is more risky, and had gone up, I’m presuming that accounts for it - combined with the general macroeconomic situation?
That said, I’m sure I read somewhere that said that they’re not currently seeing a higher level of default so just an accounting treatment?
A related question for me, but how are losses accounted for if they aren’t actually realised? So if there’s a provision for £100m but losses are only £10m (or are actually £200m) how are those represented in the figures?
You have bad debt costs where the losses are crystallised (e.g. you write off the loan as you think it’s irrecoverable).
But more broadly you will make a provision for losses you expect. So say x% of loan value where the customer has missed one payment, y% of loan value where the customer has missed two month’s payments. When you create the bad debt provision you have a cost on your accounts. If you overprovision and the losses don’t crystallise in future you can then release the provision which will effectively create a credit or income of sorts in future.
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Great news.
Now drop the £5 fee off the business account and you’d have significantly more business deposits and free interest. I went with Starling business a long time ago because of that - pay tiering Xero integration is mad, because many small businesses don’t need many features, but they need to be able to integrate with xero/QuickBooks, etc
Is the fee still more competitive than other banks, IE high street banks?
I have a tiny company to look after the building my flat is in and I ended up with Barclays as Monzo, Revolut, Starling et al do not support that sort of business - it is £8.50 a month now after an initial “free” period. It manages to work with my Xero most of the time!
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Developments related to this news, presumably:
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That completely slipped my mind!
The annual report seems to suggest it’s a permanent replacement though?
Hence my decision to use the word “Developments”. Without knowing the ins and outs (and I have no expectation of ever knowing), it’s hard to say, but I think it’s always better to keep interim periods short and replace early (within reason) if the original person can’t come back.
Would seem better than my own experiences in places where I’ve worked when people have been seconded or ‘temporarily’ replaced for a year or more before making the change permanent, and uncertainty has a negative effect.
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I chatted to our finance team on the broader point around borrowing
As @sacha said, to be clear “Impairment charges to cover expected credit losses” isn’t money we’ve lost – they’re amounts we hold in case customers are unable to repay us, either partially or in full and are part of the accounting standards we are required to follow, which make banks safer when they lend. As with all lenders, when customers borrow from us we have to estimate potential future losses against all our customers. As we’ve grown our borrowing business significantly this year, its normal to see our provisions increase too.
We aren’t seeing a large increase in customers going in to arrears. But given the wider economic climate, we’re being especially prudent when we calculate these estimates to make sure we’re operating safely and responsibly.
This quote from the Times piece and comment from TS sums it up well:
However, despite an industry-wide increase in provisions, most big lenders have reported that borrowers are holding up well amid the cost of living crisis. This sentiment was echoed by Anil, 51, who said Monzo was seeing “nothing unusual” in its loan portfolio. “When you have a book that’s growing as fast as our’s [in recent] years, the ECLs build up alongside that,” he said.
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RE Jonas – he’s currently on caregiver leave! We’ll ask him to jump on and explain what he’ll be focussing on when he returns 
At the moment, he’s working on streamlining the process of applying nappies 
On the company structure – there’s nothing to share beyond what’s in the report just now, but we will give further updates when we have them 
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I’ve seen a number of articles on this bad debt provisions …. If their only form of ‘lending’ was overdrafts and some personal loans… then Monzo significantly expand their loan book and introduce their credit card/BNPL product…. Of course bad debts go up! I really don’t understand why this isn’t understood
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It is understood, what I really despise is the way the papers have to shame businesses over simple facts in their wording to make it seem really bad, when it really isn’t.
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Hey everyone 
I’m here to share a bit more about the company structure change you spotted in our last annual report. If you’re a crowd investor, you’ll soon get an update on this through Crowdcube.
We’ve introduced a new holding or ‘parent’ company, Monzo HoldCo
The new Monzo HoldCo sits at the top of our corporate structure and is Monzo Bank Limited’s ‘parent’ company.
This is something almost all companies that intend to expand internationally like ours do, especially in banking.
It doesn’t affect our day-to-day operations or activities, but it gives us the flexibility to grow in the UK and abroad.
As a regulated bank, this process has been subject to standard review and approval processes which have also been completed.
If you’re a crowd investor…
This change wouldn’t alter anything for you.
Your current Monzo Bank Limited shares are automatically swapped for shares in the new Monzo HoldCo through CrowdCube.
The change won’t affect how you’d be able to sell your shares once there’s an opportunity to (as you know you can’t sell your shares right now as there’s no trading market for them).
If you have any specific questions about your investment, you can email nominee@crowdcube.com.
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Thanks for explaining. For investors, will that include shares which are listed in Crowdcube as ‘Mondo’ from the first round of crowdfunding?