Monzo’s new chief executive has pledged to expand into more European countries, after the neobank decided to shut US operations, reported the Financial Times.
Diana Layfield, who took over from TS Anil in February, said the company was preparing for expansion in Europe.
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The UK-based digital bank decided to cease accepting new American customers and cut approximately 50 roles.
The move follows Monzo’s receipt of a European banking licence from Irish regulators in December and the opening of offices in Spain and Ireland. Most of the group’s revenue still comes from the UK.
“We have great momentum, but more importantly, we’re geared up for that bigger opportunity both in the UK and across Europe. There is a Monzo-shaped hole across Europe across markets,” she added.
Monzo added 3 million customers during the year, taking its total to 15.2 million, with almost all based in the UK.
Like many lenders, Monzo has been seeking to increase income from this area of the business because it is less exposed to changes in the interest rate cycle.
The bank received a full UK banking licence in 2017.
The European plans come after Monzo said it would close its US business and concentrate on markets nearer to the UK.
“The US [closure] is a very conscious strategic decision to enable us to focus on Europe. What we hadn’t seen in the US was the level of product-market fit that we wanted to see to really justify what would have been a very, very, very substantial investment in distribution and marketing in the US,” said Layfield.
Monzo’s reliance on the UK market had raised concerns within the board and was among the factors behind the decision to remove Anil last year, the FT previously reported.
Directors also raised questions about his commitment to the company after a possible stock market listing.
His exit prompted opposition from part of Monzo’s US investor base, which pushed for Anil to return to the board and for stronger investor representation. He is now vice-chair, and two additional investor representatives have joined.
Layfield said: “The board restructuring has actually been very helpful and very positive. It’s terrific to have TS on the board . . . And actually having two investor directors, I think, has given us greater depth of investor perspective.”
Monzo has often been viewed as a possible candidate for a London initial public offering and has held talks with ministers about the case for a UK listing. Layfield said the company was not moving in haste.
“We’re profitable, we’re growing, and we’re well capitalised. So we’re not in a hurry to do anything,” she said.
