Business… I mean they gave away our tax payers money to business during the pandemic…
2 Likes
Except they aren’t saying that they will be making a profit, they are saying that they have made a profit. This profitable period just happens to fall after the closing of the 2022/2023 accounting period.
Whether that will be sustained for the full year, and will be the case at the end of the next accounting period is a question, but it is correct as of now.
4 Likes
Lol, I never thought that kind of stat massaging worked on people, but apparently it does.
It’s not meaningless, but a couple of months profit could be for all sorts of seasonal reasons. They’ve said year after year they are likely to make a profit, but still haven’t posted one.
1 Like
Sure, but they’ve never said they’re profitable - which they have said this time. Guess we’ll just wait and see 
More hot takes. This time from me, @Peter_G
- Most important please can we stop using paper-based A4 presentations for this sort of thing. We’re in the 21st century and may or may not about to be rendered extinct by AI. For the love of 'zo let’s get some better designed, responsive webpages here. (See html content alongside A4 versions on gov.uk for a better approach).
Now I’ve got that out my system:
- Overall, the end of the financial year figures look “okay”. The narrative suggests that they’re purposefully investing more because that’ll generate larger returns in the future. I believe them. While press and community shy, the CEO has definitely done an excellent job plotting a path through stormy waters. Kudos. (Just explain your strategy or come see us soon, ok?)
- The average Net Promoter Score seems to be creeping down year on year. I worry that the CMA benchmarks and industry awards are lulling them into a false sense of security: the vulnerbility is customer support. Fix it.
- Speaking of which, a quiet announcement that they’re now outsourcing to South Africa. I really hope this isn’t “efficiency” finding and more for service quality.
- I became quite confused about customer numbers. Total figures are in the document as 7.4 or “over 7 million”. On the website it’s 7.5. But it’s just not clear what this relates to (UK, US, personal, business, joint?). If only there were a tracker somewhere…
- I really struggle with the “default to transparency” value these days. Of course there’s the (correct) rider that thats only the case unless there’s a good reason not to. The, to take one example, joint accounts debacle suggests that this value is only lived when convenient. Had the Product Person said “I would usually tell you, but there are commercially sensitive reasons not to” then I would have grumbled but accepted it. Instead, this value just doesn’t feel lived.
- Similarly, the annual report references the US public product roadmap. I think there are lots of lessons to be learnt from the US - but this is a cool and engaging one!
- It’s interesting that the CEO is positioning himself as “Global CEO” now. That’s always been the case, but combined with a new US CEO and European expansion, I wonder if we might see a UK CEO?
- Talking of senior positions, Jonas isn’t CTO anymore! But seems to still be on the executive committee (ExCo). What’s he doing, @AlanDoe
- And talking of structures, Monzo appears to be restructuring with a holding company (MBHG ltd) set up. Keen to understand more, especially the impact on the crowdfunders among us. @AlanDoe what gives?
- While we’re waiting for Alan (or Rapid Reaction Revels
) I suspect this might help with further expansion. A holding company and three+ country-based subsidiaries… - reading the financials, it seems to me that Monzo is very much a slow juggernaut picking up speed. It does feel like they’ve got their mojo back and are willing to trade short term gains/headlines for longer term success.
- There are some really interesting breakdowns of customer numbers by product type and revenues. Flex has 300,000 customers, Plus and Premium 350,000 and business 200,000. Sounds like this financial year they’ll be pushing the business product a bit more…
- Plus, Premium and Business brought in 19.5m, which (according to my calculator) means that each paying customer brought in £55.71 each in the last year. Now, lots of them would have only been for part of the year but that’s £4.64/user/month. I don’t have last year’s subscription numbers to hand, but it’d be interesting to see whether, on a per user basis, the figure has gone up or down (last year’s revenues were £11m).
- The FCA investigation rumbles on. I hadn’t seen it disclosed in such stark terms as this though: “As disclosed last year, in 2021 the FCA commenced an investigation into our compliance with the Money Laundering Regulations 2017, potential breaches of some of the FCA Principles for Businesses and related FCA rules for anti-money laundering and financial crime systems and controls. The period under investigation is 1 October 2018 to 30 June 2022. The investigation is a dual-track civil and criminal matter. We continue to cooperate with the FCA in their investigation.” (If it turns out that the issue was money laundering through joint accounts I’ll say a very public apology).
- Reading the runes, it feels like we can expect more savings pots like the emergency fund, with pots for house deposits (cash or stocks and shares LISAs?), maybe mortgage brokerage / partnerships (“buying a home”), insurance (“protecting what’s important”), and pensions (“planning for retirement”). No mention that I could see of the forthcoming investments product in the report itself though, that I could see at least…
This feels like a very serious, very grown up report from an organisation that’s poised for growth in its home market and internationally.
I’m very impressed by the work done by everyone at Monzo. Hats off! :Why-is-there-no-hat-emoji?:
15 Likes
There is a lot of Covid loans still in accounts at Starling, but also their customer base is older with high cash at hand, compared to Monzo who are younger and more likely paying the bills and rent
2 Likes
Flushing out the FCA investigation would be useful, and it’s probably not helped that the FCA is stretched to breaking point anyway.
What’s the financial damage going to be (I suspect, less the £10m and a public dressing down) when will it conclude, and what’s happened to fincrime internally to ensure it doesn’t happen at scale again
1 Like
Presumably they can’t talk about this until it’s all over but if they haven’t reread all the manuals, readjusted their controls and aren’t squeaky clean now then I’ll eat my non existent hat emoji.
1 Like
I know they’ve thrown bodies at it and upskilling the team, but what has that meant numbers wise? What’s the knock on elsewhere, be that resource or development of joint accounts, and I’m fascinated to see if the FCA eats some crow too, and sees failings in its guidance
1 Like
This is best case.
Worst case is that it was wilful, there were bad apples or there is a criminal prosecution. But I’m very hopeful that that wasn’t what happened!
1 Like
Definitely a great year , and solid accomplishments !
Regarding Monzo current valuation , it seems that we could be just slightly higher than the one of last funding round round(£3.7bn)If we take current ARR of £500M and average multiple for fintechs 8 , we are at £4 bn.
2 Likes
Do you have a sense of how that might translate into share price?
It means probably no significant change of share price versus end 2021
1 Like
Regarding the numbers, the report is FY2023 = 7.4m, the splash page says “7.5 million people bank with Monzo as of May 2023” so that seems to include customers after the end of the financial year.
Congratulations Monzo on profitability 
Looking forward to deep diving the report.
4 Likes
5 Likes
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…
1 Like
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.
3 Likes
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?