The United Kingdom’s Starling Bank has closed its third profitable year, as the challenger bank finished the fiscal year 2024, which ended on 31 March, with a pre-tax profit of £301.1 million on a revenue of £682.2 million.
Interest Income Pushing the Profits
While the pre-tax profit of the neobank jumped by 55 percent year-over-year, the revenue surged by 51 percent. The total deposits in the bank also increased by 4 percent to £11 billion.
“This is our third full year of profitability demonstrating a robust financial performance,” said the Interim CEO of Starling Bank, John Mountain, who has been holding the apex role since the departure of Anne Boden. The UK-based bank has already named Raman Bhatia as the Group CEO and the permanent replacement for Boden, who will take over later this month.
The challenger bank benefited significantly from the higher interest rate as net interest income rose to around £593 million from £349 million the year before. Even the bank's annual report highlighted that “Interest income continues to be the main source of revenue.”
Adding More and More Customers
Furthermore, the number of customer accounts at the end of the fiscal year jumped to 4.2 million from 3.6 million, and the core active accounts also increased to 2.9 million from 2.4 million.
The London-headquartered bank also managed to improve the average revenue per active customer to £242 from £200 in the previous fiscal year.
Starling operates completely as a digital bank, meaning it has no physical branches. There were also reports that the challenger bank is exploring the possibility of going public. However, there was no official confirmation of any such moves.
“Looking to the future, I see in Starling a well-capitalised bank that has grown rapidly but that has captured 2.8% of the UK current account market so far, leaving significant headroom for further domestic expansion,” Mountain added. “In Engine, I see a world-class technology provider that has just begun to crack open a £91bn global addressable market for SaaS.”
