Starling Bank Ltd. has resumed discussions with the Central Bank of Ireland about obtaining an Irish banking license as U.K. lockdown restrictions ease.
The U.K.-based digital bank is expected to expand internationally by 2021, CEO Anne Boden said in a letter to investors. Its launch in Ireland will act as a springboard to further expansion in Europe, beginning in the Netherlands, France and Germany. The bank raised £60 million for its expansion into Ireland, but talks were stalled due to the coronavirus crisis.
Despite the pandemic, Boden said investors were able to help the bank raise £100 million since the end of the financial year, Nov. 30, 2019, bringing its total raised to date to £363 million.
The bank was able to open more than 1.5 million accounts and it had about £3 billion on deposit as of the end of July, compared to 926,000 retail accounts opened, including 82,000 business and sole trader accounts, and £1 billion on deposit at the end of November 2019.
The number of customers using their account grew daily by more than 60% between the end of 2019 and July 2020. Typical active retail customers credit and debit their accounts by more than £1,500 per month, while the figure is more than £6,500 for typical active small and medium-sized enterprise customers, Boden said. The annualized revenue run rate increased to £80 million as card volumes were back to pre-lockdown levels, despite the coronavirus crisis leading to a drop in interchange income for several weeks.
Boden noted Starling Bank's loan book increased to more than £1 billion from below £100 million. It has lent to more than 25,000 SMEs under the Coronavirus Business Interruption Loans Scheme, or CBILS, and Bounce Back Loans Scheme and provided £300 million of CBILS lending to small businesses as part of its partnership with Funding Circle.
Starling also plans to apply for a further grant of either £35 million or £25 million from a fund created to increase competition in the market for SME banking. The bank was awarded £100 million under this grant last financial year. Boden said they will use it to target larger SMEs and those with more complex ownership structures, as well as non-profits, should the application be successful. She added the bank will also invest a significant amount of its money in its expansion plans.