Nu Holdings, which owns Brazil’s Nubank, is in talks to buy UK digital bank Monzo in a deal that could value it at £8 billion to £10 billion, Sky News reported.

The talks are still at an early point, but Monzo has hired Morgan Stanley and Qatalyst to advise it, and both sides are now working out the main terms.

Banking sources expect any deal to combine cash and shares.

A person close to the matter said a sale is one of two options for Monzo’s board and shareholders.

The other is to raise new funds at a valuation of more than £8 billion, with the money used to expand the bank in mainland Europe.

Either option would value Monzo well above the £4.5 billion it was worth in a share sale in October 2024.

A takeover would mean Monzo could not list on its own in London in the near term.

UK ministers and the London Stock Exchange have urged the bank to list at home, though a US listing remains possible given where many of its investors are based.

The talks are of interest to Singapore too, as a Singaporean sovereign wealth fund is among Monzo’s shareholders.

Meanwhile, Monzo declined to comment, and Nu Holdings said it does not respond to market rumours.

Featured image: Edited by Fintech News Switzerland, based on image by Nubank via its website.