Digital lender Starling Bank has said it is “very much on track” to make its first full-year profit as soaring lending helped trim annual losses.
The challenger bank said pre-tax losses narrowed to £39.1 million in the year to November 30, from £53.6 million the previous year.
Starling – which has now switched its financial year-end to March 31 – said it broke even in October and has been profitable each month since then.
Results for the four months to March 31 show a maiden pre-tax profit of £7.6 million, with profits of £7.3 million in its first quarter to June 30 against losses of £13.1 million a year ago.
Chief executive Anne Boden, who founded the bank in 2014, said Starling was “very much on track” to post its first full year of profits in 2021-22.
She confirmed the group was still eyeing a possible stock market flotation at the end of 2022 or early 2023, but said the timetable has not been brought forward despite the recent spate of listings.
She said: “We’re going to do it in our time.
“We’re not going to be forced to do it because it’s fashionable at the moment.”
The bank’s results showed total lending has jumped to £2.3 billion in its first quarter thanks in part to lending under the Government’s business loans support schemes.
It said it has lent more than £1.59 billion under the Bounce Back Loan Scheme and more than £595 million under the Coronavirus Business Interruption Loan Scheme.
The group now has more than 2.3 million customer accounts, of which over 370,000 are small businesses, having more than doubled its SME customer base in the past year, giving it a 6.3% share of the UK small firms banking market.
Total customer deposits rocketed to £6.8 billion in the first quarter, from £2.8 billion a year ago.
Ms Boden said: “Starling is pulling away from the rest of the fintech pack.
“Now that we are profitable and growing responsibly, we’re gaining momentum, generating our own capital, and executing on our strategy to expand lending.”
The results come after fellow digital player Revolut also said it was on the path to profitability, having been “strongly profitable” in the first quarter of 2021, as it became Britain’s most valuable fintech firm.
The banking app was valued at a record-breaking 33 billion US dollars (£24 billion) after securing 800 million US dollars (£578 million) in its latest funding round, despite having nearly doubled losses last year, to £208 million.