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Starling Bank trading update, three months to end October 2020

Starling Bank trading update, three months to end October 2020 | Fintech Finance

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




Number of Accounts – Business




Number of Accounts – Other Currency (EUR and USD)




Average Deposits – Business




Average Deposits – Sole Trader




Average Deposit – Retail








Gross Lending




Annualised Run Rate Revenue




Operating Costs (annualised)




Operating Profit (annualised)





Starling generated 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




Interest Expense




Net Interest Income




Fees and Commissions Income




Total Operating Income




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





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 basis 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




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 (£)





Government-backed lending