UK mobile lender Starling Bank has reported its third consecutive year of profitability, showcasing a remarkable 55% increase in pre-tax profits to £301.1 million and a 51% rise in revenue to £682.2 million. The bank’s total customer accounts surged from 3.6 million to 4.2 million, and card spending climbed from £16.5 billion to £19.9 billion.
Strong Customer Growth and Financial Performance
Starling’s fixed-term deposits skyrocketed from zero to £430.6 million, contributing to a 4% increase in total deposits to £11 billion. Interim CEO John Mountain attributes this growth to the bank’s ability to attract customers in a competitive market, delivering exceptional experiences through its app and UK-based customer service agents. He noted that higher base rates significantly boosted the net interest margin, which rose from 2.72% to 4.34%.
Expansion through Banking-as-a-Service
Starling Bank aims to further enhance profitability with its new Banking-as-a-Service proposition, Engine. The platform has already secured its first two clients in Australia and Romania. According to Chrysalis, a key investor, Engine could generate hundreds of millions of pounds annually, propelling Starling towards a £10 billion valuation.
Mountain commented, “Looking to the future, I see in Starling a well-capitalised bank that has grown rapidly
but has captured only 2.8% of the UK current account market so far, leaving significant headroom for further domestic expansion. In Engine, I see a world-class technology provider that has just begun to crack open a £91bn global addressable market for SaaS.”
Preparing for an IPO
Starling remains committed to a public float in London, with plans for an IPO actively discussed in board meetings and with shareholders. While a specific date has not been set, the bank is laying the groundwork for this significant step.
Mountain will soon step aside to make way for Raman Bhatia, the current CEO of energy retailer OVO and former HSBC digital banking lead. Bhatia will take over as CEO following the departure of founder Anne Boden and will lead the firm’s IPO planning.
Starling’s continued success highlights its ability to innovate and grow in a competitive financial landscape. With a focus on customer satisfaction and technological advancement, the bank is well-positioned to achieve even greater milestones in the coming years.
For more updates and detailed insights into Starling Bank’s growth and future plans, visit Starling Bank News.
