Digital bank Monzo has more than doubled its pre-tax losses in the last year, according to the company’s annual report for 2019–2020, which was published on Thursday.

The fintech saw losses grow to £115.4 million; 2x the previous year, where it logged pre-tax losses of £50.7 million.

This is partly fuelled by heavy investment last year — including an expansion to the US and application for a bank licence there.

The report also flagged concerns about the bank’s future in light of the pandemic: “There are material uncertainties that cast significant doubt upon the Group’s ability to continue as a going concern,” it stated.

“Our revenue streams have been significantly impacted by the COVID-19 pandemic and resulting macro-economic uncertainty.”

Over the course of 2019, Monzo recorded £67.2m in adjusted revenue, a jump from 2018 when it brought in £19.7m. Its main source of revenue is collecting a 0.2% interchange fee from its 4.3m customers using their cards.

Monzo has also ramped up its lending efforts, lending out £143.9m last year, having only lent out £19m the previous year. Nonetheless, it expects its credit losses to be as high as £20m; potentially a conservative measure but very high regardless.

Meanwhile, Monzos’s customer deposit-base doubled to over £1bn, across 2.3m new customers last year.

It will now be interesting to compare these figures to Monzo’s slightly older rival Revolut, which is yet to release its 2019 annual reports. For context, Revolut reported £58.2m in revenue in 2018 and a £33m operating loss.

Profitability in sight?

The company hasn’t gotten off to the strongest start so far this year.

User downloads and usage have dived amid lockdown, and the fintech was also forced into a 40% downround; with its valuation diving to £1.25bn.

Monzo and its peers are also preparing for a sustained revenue crunch, taking serious cost-cutting measures. Revolut, Monzo and N26 have all cut senior salaries, while the latter two will also furlough or reduce the working hours of over 150 employees each.

“Our revenue streams have been significantly impacted by the COVID-19 pandemic and resulting macro-economic uncertainty,” Monzo wrote in its latest annual report, as well as casting doubt on its future.

Meanwhile, Monzo’s launch in the US seems to have lost momentum, not least because the man they appointed to spearhead the expansion — TS Anil — is leaving his post in the US to take over the reins of the entire company as chief executive.

It could also be several years before Monzo’s application for a US bank licence materialises.

Still, Monzo has previously indicated it hopes to break even as early as 2022.

The company recently introduced two new revenue channels, launching a business product and £5 a-month premium accounts.

Its investors will now be banking on Monzo’s new chief executive veteran banker TS Anil to unite the team for a difficult year ahead.