Nubank shuts down rumors it's buying Monzo

• Key insight: Nubank filed a Form 6-K with the SEC this week to confirm that it is not planning to acquire the digital bank Monzo after media reports.
• Expert quote: "This development puts more pressure on Monzo from shareholders to find additional funding to pursue other EU markets." —Javelin's Emmett Higdon

Nubank has dispelled reports that it was in talks to acquire U.K. digital bank Monzo.

The Brazil-based digital bank filed a statement to the Securities and Exchange Commission on Wednesday stating that "the company is not pursuing a transaction with Monzo" and "Nu's capital allocation framework is unchanged."

The statement was in response to media reports on the potential of a deal between the two banks, which began when U.K.-based Sky News published a report last week alleging that Monzo was in talks regarding a sale to Nubank.

"We believe a potential deal makes a lot of sense for Nu, as it provides access to a scaled and profitable neobank in the U.K. and Europe," Needham and Company analysts said in a research note on Monday. "We also see potential for a post-acquisition Monzo to operate with a materially larger credit business which would further boost growth and profitability."

In the Form 6-K filed to the SEC, Nubank stated that "as a matter of general practice, the company does not comment on specific opportunities" but made an exception in this case "given the extent of recent media speculation." 

Nubank emphasized its focus on current international expansions in the statement, including "building its presence in the United States and around the world through Nu Global." Nubank did not immediately respond to a request for additional comment.

Nubank recently launched its digital and mobile banking services in the U.S. through a bridge partnership with Lead Bank while it awaits final approval for its U.S. bank charter, which was conditionally approved in January of this year.

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Monzo exited the U.S. digital banking market in April of this year, stating at the time that the company was shifting focus to its domestic market and European expansion efforts. Monzo declined a request for comment.

"This development puts more pressure on Monzo from shareholders to find additional funding to pursue other E.U. markets," Emmett Higdon, director of digital banking at Javelin Strategy and Research, told American Banker.