Starling Bank announces a full year of profits

By Joy Dumasia

Starling Bank reports its first full year of profitability; the digital bank swung to a pre-tax profit of £32.1m for the financial year ending 31 March 2022 from a pre-tax loss of £31.5m for the period to 31 March 2021. Revenue for the same period to 31 March 2022 was £188m. Starling’s previous financial year, to 31 March 2021, covered 16 months to reflect a change in the timing of the bank’s financial reporting.

In the three months following its latest accounts, Starling has continued to grow at pace and in June 2022 reports an annualised revenue run rate of £331.2m driven by year-on-year lending growth of 72% to £4b.

Starling continues to build on the mortgage capability is gained through the acquisition of Fleet Mortgages in July 2021, with more than £2b of mortgages now on the balance sheet as of June 2022. This growth in lending has been funded by Starling’s growing deposit base, which increased by a further £600m in just three months.

The pre-tax ROTE for June 2022 is already best-in-class for a UK bank at 17.5%, compared to c.11% for the large high street banks and 16% for other specialist and mid-tier lenders. This is despite Starling holding a significant capital surplus above its regulatory minimum as a result of its most recent funding round.  

Anne Boden, Founder and Chief Executive of Starling Bank, said: “With our first full year of profitability, we’ve placed ourselves firmly in a category of one. As an innovative digital bank with a sustainable business model and a strong balance sheet, we are generating our own capital, and we stand apart from both the old banks and other challengers.”

IBS Intelligence also reported that Starling Bank surveyed 1,046 business leaders, seven in ten (70%) say they find it hard to come up with new and innovative ideas on their own, and a similar number (68%) said they want more advice from their peers when it comes to running their business. Two-thirds of small business leaders (63%) feel lonely in their role, which could prevent their company from reaching its full potential.