Bunq Targets UK Market with EMI Licence Amidst IPO Plans
Hey FinTech Fanatic!
We start the week with interesting news from Amsterdam. Neobank Bunq, Europe's second-largest with 11 million customers, is seeking a UK payments license, aiming to rival Revolut and Monzo as it prepares for an IPO.
The Amsterdam-based bank, profitable for the first time in 2023 with a net profit of €53.1m, caters to digital nomads.
In the last quarter of 2023, bunq’s gross fee income grew by 20%, compared to the last quarter of 2022, and user deposits grew almost fourfold, from €1.8 billion to almost €7 billion at the end of 2023. Gross interest income in the last quarter of 2023 grew by 488%, compared to the same period in 2022.
A testament to bunq’s sustainable business model proven to yield record profits throughout 2023, the challenger will direct its net profit to propel its global expansion strategy.
Despite halting new UK accounts post-Brexit, Bunq still serves existing UK clients, unlike Germany's N26, which exited the UK entirely.
Bunq has applied for an E-Money Institution (EMI) licence with the UK's Financial Conduct Authority. With a European banking licence and a pending application in the US, Bunq's UK EMI licence would enable access to the large market of British digital nomads, where the UK ranks second globally.
While not pursuing a full UK banking licence currently, Niknam sees the EMI licence as a strategic start, serving EU and UK citizens working across regions.
Ali Niknam also said the firm has always had a “dream” of IPO-ing eventually.
“The one thing I have not yet done in my entrepreneurial life is an IPO,” he said. “But we will let our timing and our actions be decided by the wants and needs of our users. And at this point in time, I think we’re doing perfectly well.”
Nikham added: “London could be a consideration. There are some regulatory advantages to being in London, but then there’s also obviously the disadvantage of not being part of a bigger block like the US or the EU. The jury’s out on that one.”
Bunq’s gross fee income grew by 20 per cent year-on-year in the fourth quarter, while user deposits rose nearly fourfold to just under €7bn.
2024 is going to be an interesting year with a lot of potential IPO's in FinTech. I'll keep you informed in this daily mailing.
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