Anne Boden/Starling Bank.
Starling Bank’s 2020 results show no “material change” from Covid-19, as revenues leap 370%
CEO Anne Boden says profitability is back on track for 2020 as the current tough economic environment “is what Starling was made for”.
In the wake of Covid-19 digital challenger bank Starling has seen its annualised revenue run rate increase by over 370 per cent, to £80m, with CEO Anne Boden now saying that profitability is back on track for 2020.
The sharp increase has been led by huge jumps in retail account numbers and a more than doubling of Starling’s business accounts to over 200,000, with the bank now boasting over 1.5m accounts in total.
Given the sharp changes of the last six months, Boden today published an interim trading update covering the last eight months, along with Starling’sfull 2020 annual report which covers the 12 months to November 2019.
The bank said that the last few months had been “transformational” for the business, leading it to publish these additional figures.
“In March we didn't know what would happen to our business, and we didn't know how we would respond or how the market would respond,” said Boden, speaking to reporters ahead of the results’ publication.
“By the time we got to April we came to the conclusion that, this is what Starling was made for really, we're very good at working from home, we're flexible, and we love a challenge.”
Indeed, Starling’s annual report details that for the year to November 2019 the business saw an income of £17m (up from £3m the previous year), but by July 2020 that figure had reached a monthly income of £6.7m.
However, ahead of the results’ publication Boden said that the business is now very much: “back on track to be profitable by the end of the year”.
In November Starling’s customers deposits and total lending stood at £1bn and a moderate £54.2m (up from £202m and £8.69m the previous year), those figures by the end of July 2020 had soared to an incredible £3bn in deposits and £1bn in lending—hugely boosted by Starling’s involvement in Bounce Back Loans and CBILS which account for £903m of the total.
Customer average deposits also jumped by at least 30 per cent across the board, from £950 in December 2019 to £1,500 in July for retail customers, £1,900 to £2,850 for sole traders and £12,000 to £15,250 for limited businesses.
“We're doing really well financially, it's a horrible thing to say, but the crisis has given us the opportunity of really really spending some time focusing on getting new products out, getting new things launched, and consolidating our position,” said Boden.
“And we are back on track to be profitable by the end of the year.”
Starling said its employee base has grown by nearly 150 since the start of the lockdown alone, now standing at 958, with Boden adding that she expected the bank to reach around 1,100-1,200 by the middle of 2021 where it would remain for the time being.
Finally, on the topic of international expansion, Boden told reporters that while work on Starling’s Irish banking licence had stopped at the end of last year and during Covid-19, the team are now “fully engaged”.
The CEO said an Ireland launch is now planned for 2021, with more markets planned “now we need to figure out which countries and which order.”