British digital bank Monzo in talks to buy Nordic lender Lunar

LONDON (Reuters) – British digital bank Monzo is in early stage discussions about a potential acquisition of Nordic lender Lunar Group, a person familiar with the matter told Reuters.

Bloomberg News reported the talks earlier on Wednesday, adding that Monzo had studied other potential targets to help it expand in Europe.

Lunar and Monzo declined to comment.

Digital banking bosses have predicted a spate of deals this year, after a combination of rate hikes and investor caution made it harder for digital finance firms to raise new funds.

Monzo is one of Britain’s highest-profile financial technology companies, with 7.4 million customers. But since its launch in 2015, it has yet to turn a full-year profit, unlike some rivals such as Starling.

In the year to February 2023, Monzo’s annual loss got marginally smaller.

Denmark-based digital bank Lunar says it has 650,000 customers across its home market, Sweden and Norway. It raised 35 million euro ($38.56 million) in February, according to its website.

($1 = 0.9077 euros)

(Reporting by Iain Withers and Elizabeth Howcroft; editing by Sinead Cruise and Devika Syamnath)