News

Starling Bank moves into profit

0
wired bank reviews starling
Share this article

Starling Bank has hit a rare neobanking milestone, achieving break even in October and on course to return monthly profits from here onwards.

With nearly 1.8 million accounts, £4 billion in deposits and £1.5 billion of lending, Starling generated £9 million of revenue for the month of October 2020, which represents an annualised run rate of £108 million.

Anne Bodin, Starling founder and CEO says: “This gave us a positive operating profit of £0.8 million for the month of October 2020, or £10 million on an annualised basis.”

Revenue at the mobile-only bank is split £5.5 million of net interest income and £3.5 million of gross fees and commissions income. It represents a four fold increase in revenue compared to 12 months ago and is a third higher than its last trading update three months ago.

Operating costs have increased by 30% in the past year, while customer accounts almost doubled and fixed costs have broadly remained flat over the last 12 months.

The average balance in retail accounts stands at £1,625, with £14,900 for business accounts and £3,100 for sole trader accounts.

“We’ve never ‘bought’ customers with cash incentives, or promotions,” says Boden. “We don’t have jazzy metal cards and we don’t offer ‘perks’ such as access to premium airport lounges. Customers join us for the features that help them manage their money and their businesses in a more effective way. They want to be part of the Starling ecosystem with its range of current, joint, euro, dollar and business accounts.”

With cash in the bank, Starling is preparing for a fresh assault on European banking markets.

“I’m certain that we will become a formidable competitor in the European banking market as we gear up to scale across Europe,” says Boden. “We know that our technology is hugely scalable because our tech team runs a constant simulation at around ten times our current capacity. We’re prepared for a sudden influx of customers and transactions.”

Starling’s ultimate goal is a float on the London Stock Exchange. Speaking in January, Boden said:”I didn’t do all of this to sell out to a big bank. I think the future for us will be an IPO in two to three years’ time.

“We’re demonstrating a path to profitability that other digital banks have not.”

Comments

Was this post helpful?

Share this article

Nigeria needs to spend $3 trillion in over 30 years to bridge infrastructural gap – Moody’s Report

Previous article

Citi Partners With Mastercard For Google Pay Plex Accounts

Next article

You may also like

Comments

Comments are closed.

More in News