Starling Bank sees profits and revenue drop amid lower interest rates
Lower interest rates hit Starling Bank’s bottom line in the past year, its annual results show.
In the year to 31 March, the fintech firm’s annual pre-tax profit came in at £217million, down 3 per cent from a year ago.
Starling’s revenue fell 5.6 per cent to £887million in the period, with the Bank of England’s lower base rate cited as the primary headwind.
Interest rates fell by an average 91 basis points over the year, which led to interest income dropping £52.5million to £759.2million.
The group said it made a number of ‘controlled’ account closures during the year as it focused on cleaning up historical control gaps and boosting economic crime controls.
Total customer deposits rose 5.2 per cent to £12.7billion, with the average deposit climbing by eight per cent to £4,241.
Lower: Starling Bank saw its profit and revenue fall in the past year
Approximately 900,000 new accounts were opened with Starling in the past year, representing an increase of 17 per cent, taking the group’s overall count to 6.2million.
This was driven by a more than 60 per cent rise from Engine, which grew by another 500,000 accounts managed through partnerships.
Engine is the part of the business which sees it sell its proprietary tech to other banks worldwide – a potential way to crack the all-important US market.
New accounts opened directly with Starling increased 6.5 per cent to 4.9million, the business said.
Starling said transaction volumes rose to £217billion, up from £197billion a year ago.
Total drawn small business lending by Starling fell nearly 50 per cent to £222.3million in the period, down from £441.4million the previous year.
Declan Ferguson, the group’s chief financial officer, said: ‘Our business delivered sustained earnings against a backdrop of softening rates and certain regulatory restrictions that moderated our ability to grow our UK customer base during the financial year.’
Chief executive Raman Bhatia said ‘more customers used [Starling] as their primary bank’.
In April, Bhatia told This is Money he wants to pull Starling into the artificial intelligence age as the business continues to fend off competition from Monzo and Revolut.
Starling claims its agentic AI ‘assistant’, which uses Google Gemini, will help manage customers’ personal finances and share ‘personalised financial insights’.
On a potential stock exchange listing, Bhatia told This is Money in April: ‘We’re non-committal around timing and venue. We have surplus capital, so we don’t need to list per se, but eventually we want to.’
Earlier this week Monzo reported a surge in profits after it bagged a record number of new customers.
Monzo said pre-tax profits had soared to £87.3 million for the year ending 31 March 2026, up 44 per cent on the £60.5million it made the year before.
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