The British challenger Monzo bank has relaunched its premium ‘Monzo Plus’ account with a £5/month fee. And their customers embraced it.
Monzo bank has had a tough year so far. The Bank of England issued Monzo to have a capital worth of 13.6 percent of its risk-weighted assets to be protected against potential losses. Before the rule change, Monzo was required to have capital worth at 9 percent.
Then Monzo had to raise money to meet the requirement and managed to secure £60 million in top-up funding. But the paper value of the challenger bank dropped from £2.0 billion to £1.25 billion during the process.
In May, Tom Blomfield quit as CEO and TS Anil was assigned as the new CEO of the company. Anil was previously assigned as a leader for the Monzo’s US push. He has 25-year financial services experience, previously he was Visa’s global head of payment products and platforms but he has also worked for Citi, Capital One, and Standard Chartered.
With the situation being critical for Monzo already, Anil said: “Similar to many businesses, we’re seeing a significant impact from COVID-19 and the resulting economic downturn. While I’m confident these are short-term, we’ve taken decisive measures to reduce the financial impact.”
“Over the coming months, we’ll launch powerful new products that help people manage their money better, as well as drive revenue, and cement our place as the UK’s most recommended and fastest-growing bank,” he added.
“Honestly nothing fazes TS. He really can handle high amounts of stress and never shows it. I watched him transform a business and lead through the financial crisis,” Meghan Connolly, who worked under Anil at Standard Chartered told Sifted.
The “powerful new product” that TS Anil had on mind was most likely nothing less than the Monzo Plus premium account. And Monzo Plus now has over 50,000 active users since the subscription service’s launch just over a month ago, first reported by The Times and confirmed by AltFi’s sources.
But during the last year, Monzo bank losses jumped from £47.2m to £113.8m with costly marketing and the US expansion. This sharp increase in losses was not covered even by Monzo’s rise in revenues from 19.7m to £67.2m.
This means Monzo bank is still going to need more of their current customers (4.5m) to subscribe to at least cover their losses.