The sum of loans and advances granted by Revolut, Nubank, Monzo, and Starling Bank increased by 50.4% throughout 2025, while the deposits and customer balances of these four entities rose by 47.3%, according to the report "The Digital Banking Monitor," prepared by Alvarez & Marsal (A&M).
With this behavior, the total business volume of these digital banks reached 201.252 billion dollars —about 172,500 euros— in the last fiscal year, which implies a growth of 47.9% compared to 2024.
According to the professional services firm, these figures demonstrate "a transformation of the business models of digital banking," which after an initial phase focused on accounts, cards, payments, and currency exchange, is extending its catalog towards consumer credit, business financing, savings, and investment.
The document clarifies, however, that the pace of expansion and the way of growing are not homogeneous. Some entities channel an increasingly larger part of their deposits towards granting financing, while others choose to maintain "more liquid" balances and an exposure still "limited" to credit risk.
Revolut leads credit growth with a 120% increase
By entity, Revolut was the one that most increased its loan portfolio, with a year-on-year advance of 119.5%. In parallel, the company raised its deposits by 65.1%, in line with the increase in its customer base and the expansion of its financial services offering.
Despite this dynamism, credit still has a reduced weight in its balance sheet. The loan-to-deposit ratio closed 2025 at 5.8%, compared to 4.4% in the previous fiscal year. "This means that Revolut continues to keep the majority of its customers' resources in liquid assets, while gradually developing its financing capabilities," explain the authors of the report.
In parallel, Nubank increased its loans by 57.5% and its deposits by 45.3%, while Monzo recorded increases of 44.3% and 54.9%, respectively, in loans and deposits. As for Wise, the consultancy clarifies that it is excluded from the credit comparison, as its model focuses mainly on payments and international transfers and does not use customer balances to grant financing.
Digital banks allocate four times fewer deposits to credit than traditional banking
The study highlights that the divergences between entities become especially visible in the loan-to-deposit ratio, which indicates what part of the resources gathered is directed to financing households and businesses.
Nubank reached a ratio of 66% in 2025, compared to 60.9% the previous year, and is the only one of the analyzed neobanks that uses its deposits to grant loans on a massive scale. Starling Bank ranks second, with 40.7%, driven mainly by its financing business for SMEs in the United Kingdom.
At the lower end, Monzo maintains a ratio of 9%, slightly below that of the previous year, while Revolut stands at 5.8%. Overall, the average of the examined neobanks is at 24.9%, far from the around 100% presented by traditional European banking.
"This difference offers a wide margin to increase credit activity, but it also reflects prudent risk management. The development of loans requires different capabilities than those necessary to operate accounts and payment methods, such as credit assessment systems, management of defaults, provisions, regulatory compliance, and capital consumption," the study's authors point out.
High interest margins and CET1 capital buffer drive new funding avenues
Regarding growth prospects, specialists urge transforming the "strong growth of deposits" into new sources of income, "without compromising asset quality or operational advantage."
In quantitative terms, the interest margin already accounts for 62.8% of the total income of the analyzed entities. In Nubank, it rises to 84.5% and in Starling Bank to 87.5%, compared to 24.8% of Revolut and 25.7% of Wise. "Some companies obtain most of their income from credit and interest margin, while others continue to rely mainly on fees, payments, subscriptions, currency exchange, or investment services," they detail.
Regarding the capital of digital banking, Revolut closed 2025 with a CET1 ratio of 40.7%; Monzo, 27.3%; and Starling Bank, 28.6%. Nubank, for its part, stood at 13%.
"These levels provide room to continue expanding the balance sheet and develop new lines of funding. However, the increase in credit will be accompanied by greater demands in terms of capital, supervision, and risk management," the report concludes.
In this context, analysts from Alvarez & Marsal argue that those entities capable of combining a prudent credit concession with their technological base and their lower cost structure "will be better positioned to expand the relationship with their clients and compete in a larger part of the banking business."