Skip to main content

PRESS RELEASE

Starling Bank Trading Update - October 2020

20th November 2020

London, 20th November 2020: Starling Bank today publishes a trading update for the three months to 31 October and announces that it has become the first of the new breed of digital banks to break even, thanks to strong momentum in customer accounts and revenues, coupled with a stable opex base. With nearly 1.8 million accounts, c.£4 billion in deposits and c.£1.5 billion of lending, Starling expects to be profitable on a monthly basis going forward as it continues to grow and gears up to scale across Europe. Read the CEO’s latest blog.

Key Metrics
October 2019
Last trading update (July 2020)
October 2020
Number of Accounts - Retail
827k
1.25m
1.42m
Number of Accounts - Business
74k
200k
256k
Number of Accounts - Other Currency (EUR and USD)
39k
90k
100k
Average Deposits - Business
£11,250
£15,250
£14,900
Average Deposits - Sole Trader
£1,700
£2,850
£3,100
Average Deposits - Retail
£900
£1,500
£1,625
Deposits
£897m
£3.1bn
£4.0bn
Gross Lending
£37m
£1.0bn
£1.5bn
Annualised Run Rate Revenue
£26m
£80m
£108m
Operating Costs (annualised)
£74m
£85m
£98m
Operating Profit (annualised)
(£48m)
(£4m)
£10m
Number of Accounts - Retail
October 2019
827k
Last trading update (July 2020)
1.25m
October 2020
1.42m
Number of Accounts - Business
October 2019
74k
Last trading update (July 2020)
200k
October 2020
256k
Number of Accounts - Other Currency (EUR and USD)
October 2019
39k
Last trading update (July 2020)
90k
October 2020
100k
Average Deposits - Business
October 2019
£11,250
Last trading update (July 2020)
£15,250
October 2020
£14,900
Average Deposits - Sole Trader
October 2019
£1,700
Last trading update (July 2020)
£2,850
October 2020
£3,100
Average Deposits - Retail
October 2019
£900
Last trading update (July 2020)
£1,500
October 2020
£1,625
Deposits
October 2019
£897m
Last trading update (July 2020)
£3.1bn
October 2020
£4.0bn
Gross Lending
October 2019
£37m
Last trading update (July 2020)
£1.0bn
October 2020
£1.5bn
Annualised Run Rate Revenue
October 2019
£26m
Last trading update (July 2020)
£80m
October 2020
£108m
Operating Costs (annualised)
October 2019
£74m
Last trading update (July 2020)
£85m
October 2020
£98m
Operating Profit (annualised)
October 2019
(£48m)
Last trading update (July 2020)
(£4m)
October 2020
£10m

Revenue

Starling generated a total operating income of £9.0m for the month of October 2020, which represents 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.

This is a >4x increase in revenue compared to 12 months ago, and a c.30% increase from Starling’s last trading update 3 months ago. Interest income continues to be supported by strong growth in lending volumes, particularly the extension of government-backed lending schemes.

Interchange income continues to perform well, having increased over 20% between July and October 2020, despite the increased COVID-19 restrictions put in place around the country in recent months. This is the result of strong primary account growth, as well as increased customer engagement and card spend. The vast majority of our transactions continue to occur domestically with international spend declining after a strong recovery over the summer months.

Starling continues to launch new products to the market, including chargeable subscription features such as the SME Toolkit and Kite card. While there has been strong uptake of these products, they are still a small contribution to operating income relative to interest income and present further upside to revenues and profitability in the future.

Operating Income
October 2019
October 2020
Annualised (October 2020)
Interest Income
£1.0m
£5.5m
£65.7m
Interest Expense
(£0.1m)
£0.0m (1)
£0.0m
Net Interest Income
£0.9m
£5.5m
£65.7m
Fees and Commissions Income
£1.3m
£3.5m
£41.9m
Total Operating Income
£2.2m
£9.0m
£107.7m
Interest Income
October 2019
£1.0m
October 2020
£5.5m
Annualised (October 2020)
£65.7m
Interest Expense
October 2019
(£0.1m)
October 2020
£0.0m (1)
Annualised (October 2020)
£0.0m
Net Interest Income
October 2019
£0.9m
October 2020
£5.5m
Annualised (October 2020)
£65.7m
Fees and Commissions Income
October 2019
£1.3m
October 2020
£3.5m
Annualised (October 2020)
£41.9m
Total Operating Income
October 2019
£2.2m
October 2020
£9.0m
Annualised (October 2020)
£107.7m

Operating expenses

Operating costs for October were £8.1m, with only a 30% increase in the past year while customer accounts have almost doubled. Fixed costs have increased by c.15% in the past year whilst revenue has increased >400%.

October 2019
October 2020
Annualised (October 2020)
Operating Expenses
£(6.2m)
£(8.1m)
£(97.6m)
Operating Expenses
October 2019
£(6.2m)
October 2020
£(8.1m)
Annualised (October 2020)
£(97.6m)

Profit

Starling generated a positive operating profit of £0.8m for the month of October 2020, which represents £10.1m on an annualised basis.

Customer Accounts

Customer numbers continue to see strong traction, particularly SME accounts which have increased >3x in the past year. Starling has now over 1.7 million accounts in total, including almost 1.42m retail accounts and over 256,000 SME accounts in addition to more than 100,000 multi-currency accounts.

Current Account Switch Service and Which?

Starling is winning more customers than any other UK Bank through CASS. In Q2 2020, Starling recorded the highest net switching gains of any bank in the UK with nearly 12,000 customers switching to Starling on a net basis2 and has topped the Which? Customer satisfaction table for 2020. Starling received an overall customer score of 88% and recommended provider status for the second year in the row.

Customer Deposits

As at the end of October, Starling had total customer deposits of c.£4bn. Starling continues to see strong growth in customer deposits, particularly for business customers with SME deposits increasing >5x over the last twelve months.

October 2019
October 2020
Total Deposits
£897m
£3,957m
Total Deposits
October 2019
£897m
October 2020
£3,957m

Lending

As of the end of October 2020, Starling had c.£1.5bn of lending on balance sheet, with £86m being retail customer lending and the remaining £1,379m being SME lending. We continue to serve small business customers through these difficult times via the Bounce Back Loan Scheme (BBLS) and Coronavirus Business Interruption Loan Scheme (CBILS).

Value (£)
BBLS
£1,021m
CBILS
£358m
Government-backed lending (3)
£1.4bn
BBLS
Value (£)
£1,021m
CBILS
Value (£)
£358m
Government-backed lending (3)
Value (£)
£1.4bn

1 Net of hedging

2 For Q2 2020, Starling recorded 12,786 gains and 788 losses

3 Includes £373m originated via forward flow arrangements


About Starling Bank

Starling is a leading digital bank, founded in 2014 and voted Best British Bank in 2018, 2019 and 2020. Its retail banking app offers personal, business, joint, Euro, USD, child and current accounts on Android and iOS. The Starling Marketplace offers customers in-app access to third party financial services. Starling also offers ground-breaking B2B banking and payments services.

Apply for a Starling bank account today and enjoy app-based banking at its best.

Start your application
Help