Starling Bank is heading towards profitability
- Starling Bank’s latest annual report shows steady progress towards its profitability targets.
- Starling has strived to achieve steady growth and become profitable. Increasing its presence in SME banking is an essential pillar of its strategy.
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Revenue increased by around 600%, from £ 14.7million ($ 18.9million) to £ 97.6million ($ 125.2million).
The after-tax loss fell from £ 52.1million ($ 66.8million) to £ 23.3million ($ 29.9million) over the same period.
The total accounts stood at 2.3 million as of June 30, 2021, of which 1.8 million retail current accounts, i.e.
in the United States: 374,000 accounts of small and medium-sized enterprises (SMEs) and 126,000 accounts in euros and in US dollars.
More on this: Starling has strived to achieve steady growth and become profitable. Increasing its presence in SME banking is an essential pillar of its strategy.
Starling has yet to achieve a full year of profitability, but it did start to generate monthly profit in October 2020, and CEO and founder Anne Boden said the
is “well on track to publish [its] first full year of profitability “in its 2022 tax results, by call city by CNBC.
Towards this goal, Starling made a bet for the banking space of SMEs – a promising bet, because the Success corporate-only challenger banks as OakNorth has shown.
And its efforts to penetrate this market are paying off. Earlier this month, Starling was n ° 1 in four categories at the British Banking Awards. One of those awards was for Best Business Banking Provider.
Starling also attracted the highest number of business customers who switched banking providers as part of the incentive change. Scheme operated by Banking Competition Remedies, by AltFi. The neobank gained 16,528 new commercial customers thanks to this program, ahead of Virgin Money (15,946 switchers), second.
Why it’s worth watching: Annual profitability is the holy grail that all prominent, consumer-oriented
are looking after. If Starling can prove that reliable annual profits are achievable for neobanks, this will likely become the standard that other neobanks are held to. Investors could then demand clear evidence of future profitability from other challengers. If investors start basing their fresh capital injections for neobanks on this evidence, it would limit the ability of young or unprofitable neobanks to focus on growth before income, as most consumer-focused neobanks currently do. .
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