Nubank in talks to buy Monzo

Monzo, one of Britain's best known digital banks, is in talks about a possible sale to Nubank, the Brazilian digital bank, in a deal that could value it at between eight and ten billion pounds.

The discussions, reported at the weekend, are understood to be at an early stage, and no price has been agreed. Monzo has hired the investment bank Morgan Stanley and the law firm Slaughter and May to advise on a potential cash and share deal.

Other options

Monzo is also considering alternatives, including a new round of funding. A sale would be a blow to hopes that the bank would float on the London Stock Exchange, which had been seen as a potential boost for the UK's stock market.

Who is Nubank?

Nubank, owned by Nu Holdings and listed in New York, is the largest digital bank in Latin America, serving more than 100 million customers in Brazil, Mexico and Colombia through its mobile app. Founded in 2013, it grew by offering no-fee credit cards, digital accounts, loans, insurance and investment products.

A deal for Monzo would give Nubank its first foothold in Britain and Europe, where it currently has no presence.

About Monzo

Monzo was founded in 2015 and is recognisable by its bright coral bank cards. It has grown into one of the UK's largest digital banks, with millions of customers using its app for current accounts, savings and budgeting, and it has expanded into business banking and lending.

The talks come amid a wave of consolidation in financial technology, as digital banks that grew quickly in the last decade look for the scale and investment needed to compete with established high street banks.

What happens next

If the talks progress, any deal would need approval from regulators in the UK. For Monzo's customers, nothing changes for now: accounts, cards and deposits continue as normal, and eligible deposits remain protected by the Financial Services Compensation Scheme up to the usual limit.