Monzo and the Coronavirus

Don’t google it

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I did. But chose not to question.

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Narrator: Peter googled it.

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That’s some energy…

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I retract that, I can see you are at Reading.

It initially seemed a strange post though, almost ‘press’ related on first reading.

Folks, remember to be kind, there’s no need to jump on OP for asking a fair question.

It’s a question that many businesses are asking themselves right now and the truth is, these are unprecedented difficult times for everyone right now, and nobody or company is exempt.

I do know that Tom has been in back to back board meetings for the last few days, and a lot of decisions are being made, and whatever the outcomes of those decisions are will be communicated to you all with candor as they happen. We are in a good position compared to many companies - we have a lot of capital, we have a strong customer base, we have a workforce that has already easily adapted to remote working (many of us have been primarily remote for years already) and we have an incredible executive suite and board. Other banks have systems that are difficult to adapt to remote working, and we’re lucky that we aren’t in such a position.

With that being said, advice, plans and figuring out the impact of everything that’s happening in the world is changing by the day if not by the hour at the moment and one thing that’s pretty clear is that this is a seismic change for all businesses. Business plans will change, hard decisions will be made and what projections and thoughts were true even just a few weeks ago, will need radical reshaping.

One thing that we intend to stay the same is our commitment to transparency. When these things get figured out, we’ll aim to keep you in the loop as much as we always have done, if not more.

I’m confident that we have incredible people at the top of this company committed to figuring this out, and from my limited exposure to what goes on at the very top of this company, I believe in that team.

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After the 2008 financial crisis don’t banks have to have extra money and contingency plans in place to deal with unexpected economic conditions?

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I think we can all agree that Tom does have BDE.

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I’m going to say that means Business Development Energy and there’s not anyone who can tell me otherwise.

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Can you please elaborate on the basis for this statement?

Yes, that’s exactly what I mean.

What comes up on google for you guys?!

I take it the plus will be on hold lol

Yes, they do, though not really to plan for stuff like this. They recently changed the rules to get rid of the countercyclical buffer to free up some capital

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This is so far out of the realm of things planned for.

Don’t get all the mean hate either. When people see p2p lenders potentially failing because of this (as an eg) it makes you realise nothing is necessarily immune.

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it has employee to pay, rent to pay - but currently doesn’t turn over a profit - its an assumption but a valid one. Monzo is likely to struggle to maintain itself self sufficiently without more funding over the next couple of months if the coronavirus remains very impactful on the economy

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explain why you think it will survive then - don’t just be negative give me reasons. I am trying to educate myself

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definitely not press related - I am a huge advocate of Monzo and have used them over the last two years as my main bank - I just wanted to know how people feel about it and what potential risks the coronavirus and the economic downturn on the back of the virus poses for Monzo and its future outlook as it will likely need more capital backing in the foreseeable future and I am wondering if its likely to obtain more funding given the climate.

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I like this answer. Thank you Simon - Also I think that if Monzo can push through this they could actually be in a better position at gaining a larger percentage of the market share as I can already see the possibility of major banks collapsing.

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Thats what I thought - I believe that banks are supposed to have a lot of capital reserves to prepare for unprecedented times like these …

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The business was started and continues to run from its ability to raise finance currently. As it doesn’t currently make a profit and thus makes a loss - It is only able to operate due to previous funding. Does that better explain my thought process behind that statement?

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