On Friday Founder and CEO Anne Boden announced that Starling Bank is profitable.
The challenger bank broke even in October and expects to be “monthly profitable from here onwards on an operating profit basis”.
On an annualised basis profits stand at $10mn.
The bank currently has nearly 1.8mn accounts, £4bn deposits and $1.5bn of lending.
What does this mean?
Starling has said it was on course to break even for some time, but in reality a surge in lending volumes brought about by Covid-19 and the government’s support loans like CBILS have brought this about more quickly than anyone could have imagined. Importantly, while operating costs have increased by 30% this year, the digital bank’s fixed costs have remained the same – unaffected by a rise in customer numbers.