By Daniel Lanyon on Friday 20 November 2020
A boom in business banking has helped boost Starling Bank’s coffers.
Strong momentum in new customer accounts and increasing revenues have prompted digital bank Starling to break even, according to a trading update for the three months to 31 October.
Starling Bank, which was launched by Anne Boden five years ago, is the first ‘neo-bank’ to reach this milestone, the company said.
In October Starling hit 1.42 million retail accounts compared to 827k, an increase of 71.7 per cent. Over the same period business accounts were the standout growth area with an increase of 245 per cent, from 74,000 to 256,000. Business accounts saw a 500 per cent increase in total deposits with the average amount held by SMEs also going up.
Starling now has total customer deposits of c.£4bn.
This has all helped Starling generate a positive operating profit of £0.8m for the month of October 2020, which represents £10.1m on an annualised basis.
In total Starling generated total operating income of £9m for the month of October 2020. This, it adds, translates to an annualised revenue run rate of c.£108m. This figure is split £5.5m of net interest income and £3.5m of gross fees and commissions income.
The figure represents a 400 per cent increase in revenue compared to 12 months ago and a c.30 per cent increase from Starling’s last trading update three months ago.
“Interest income continues to be supported by strong growth in lending volumes, particularly the extension of government-backed lending schemes,” Starling said.
Lending was a breakout area for Starling, which now has c.£1.5bn of lending on its balance sheet. Just £86m of this is retail customer lending and the remaining £1,379m being SME lending.
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