Starling Banks’s 2021 results see 600% jump in revenues and 8 months of profitability

Digital bank Starling reported a huge jump in revenues during the 16 months to 31 March 2021, rising by nearly 600 per cent to £97.6m.

Starling Bank CEO and founder Anne Boden said the period had been “our biggest test and our biggest success”.

Business accounts and lending remained a key driver of that growth, with 374,000 business accounts, up from 180,000 last year, pushing the bank’s total accounts to 2.1m with lending of £2.2bn.

Starling’s CFO Declan Ferguson said that these figures mean the bank is close to fulfilling its BCR pledge to reach a 6.7 per cent market share of SME customers and “we actually expect to now have... double-digit market share within the next 18 months.”

The bank’s deposit base grew by over 500 per cent to £5.8bn, up from £1bn in 2019, which Ferguson said had been key in helping it fund its vast SME lending business.

For the period of the results Starling reported a loss after tax of £23.3m, down from £52.1m the previous year. 

On a monthly basis, Boden said Starling has continued to be profitable since October 2020 and Ferguson said the bank had improved its net earnings every month since then.

On the topic of Starling’s long-awaited credit card, Boden told AltFi that the bank is now actively in-testing with an SME credit card, but declined to comment on when it would launch.

“We have built our own card processor, and we have a huge amount of technology available to process card transactions.”

On the topic of Starling Bank’s IPO, which has come up several times in the past few years, Boden wrote in her letter to customers that “an IPO is our goal, but we will seek a listing when it is right for our business, not just because it is fashionable to fit in with the pack.”

When asked about the timing of an IPO during a press conference call today she pointed to: “the end of next year, early the year after, that hasn't changed”.

One of the most interesting themes in Boden’s annual letter to customers is her interest in embedded finance.

“I’m particularly enthusiastic about the possibilities offered by embedded finance, the integration of financial services into non-financial customer journeys, and believe that Starling is well-placed to grab the opportunities arising from this,” she said.

Although Starling’s own Banking-as-a-Sevice offering, which includes payment and account services, was only lightly touched on in the results, the CEO saying that she hopes to “ramp up” the offering soon.