UK Challenger Bank withdraws its US license offer

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UK app-based challenger bank Monzo has withdrawn its US banking license application, according to reports.

The bank, which has five million customers using its app-based accounts and bright orange payment cards, has been exploring expansion in the United States since 2019.

She currently has a small partnership with Sutton Bank in Ohio with a few thousand clients and in February appointed Carol Nelson CEO of Monzo USA.

The Financial Time reported Monday that Monzo had informed the Office of the Comptroller of the Currency (OCC) that he wished to withdraw his request. The newspaper quoted a source who said the bank had been told that his request was unlikely to be granted.

The bank said in a statement: “Following a recent engagement with the OCC, we have decided to withdraw our request for a banking license for our American start-up.

However, he said he would look for other ways to increase his presence in the US as well as reinvest in his UK business, according to Reuters.

Monzo’s statement added: “There are many commercialization avenues that we are exploring that have been successful for other market entrants who are now major players. “

The bank has yet to make a profit and has seen losses reach £ 130m ($ 176.5m) in fiscal year 2020-21, in part due to the impact of the pandemic . Its listeners questioned its ability to continue operating in Monzo’s latest annual report.

However, he still managed to increase his deposit base to over £ 3 billion.

Monzo is currently under investigation by the UK financial services regulator for potential violations of anti-money laundering rules. The Financial Conduct Authority wrote to UK banks in May expressing concerns about complying with financial crime laws.



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