HSBC has announced its decision to abandon its stake in fintech Monese , as the financial institution has conceded a significant loss by writing off its investment. Monese back in 2022, which was then linked to a strategic collaboration centered on the latter’s Banking-as-a-Service (BaaS) technology.

HSBC held a 5.4% share in Monese, according to the company records. Currently, Monese is undergoing corporate restructuring, as it also signaled troubles earlier in 2024, when it expressed concerns over its viability due to difficulties in the process of securing additional capital. Its BaaS operations also evolved into an independent entity named XYB, with reported that Monese’s client banking section is set to be poised for acquisition by Pockit.

More insights on the announcement As the fintech landscape continues to burgeon, banks around the globe have been proactively engaging with the sector, whether through direct investments or by designing their own offerings and capabilities, in a bid to tap into the lucrative market and fight competition. Monese received additional support from several companies, including PayPal, Augmentum Fintech, and International Consolidated Airlines Group. Kinnevik of Sweden, one of the firm’s primary investors, discounted its own investment in the fintech in 2023.

Monese had the distinction of being an inaugural mobile-only application-based bank, but its services were reportedly eclipsed by competitors in the industry. Furthermore, the company’s pretax losses expanded from GBP 18.7 million in 2021 to GBP 30.5 million in 2022. Despite a revenue increase of 58% to GBP 27.7 million, the rising administrative costs that went to GBP 31.3 million from GBP 18.5 million dampened the company’s growth.

Both HSBC and Monese declined to comment on the announcement. Source: Link .