With profits increasing six-fold and revenues rising, Starling Bank’s CEO is stepping down.
Ann Boden, who is both founder and chief executive of the British neo-bank, announced Thursday (May 25) that she would hand the reins of the company to John Mountain, Starling’s chief operating officer.
“When I started Starling in 2014, I was told no one ever starts a bank, nobody wins market share and you’ll never make a profit,” Boden said in a news release. “Today’s results prove them wrong.”
Those results show Starling earning revenue of £453 million ($560 million) for the year, more than double last year’s figures.
The bank saw record pre-tax profits of £195 million ($243 million), a six-fold increase over last year’s £32 million. Lending was up as well, to £4.9 billion ($6.06 billion) from £3.3 billion ($4.08 billion, while customer deposits climbed 17% to £10.6 billion ($13.1 billion).
Now that the bank is established, the CEO said, it’s become clear that the roles of a chief executive and major shareholder require different approaches.
“As Starling continues to evolve and grow, separating my two roles is in the bank’s best interests,” Boden said.
Mountain has been with Starling for seven years, starting as its chief information officer before becoming COO last year. He is a director at Engine, the bank’s Software-as-a-Service-Arm, and has served as a director at Pay.UK, the company said.
As noted here last month, Starling is one of the few European neobanks to turn a profit while the majority of the sector struggles.
“The fact remains that the field is crowded, the profits are thin, the jockeying for mind and wallet share is intense,” PYMNTS wrote.
That report cites an estimate from global consultancy Simon-Kucher showing fewer than 5% of challenger banks are breaking even.
Some digital-only players received a boost when Silicon Valley and Signature banks collapsed in March and companies looked for places to move their money, but “deposit ‘loyalty’ might prove elusive as these same enterprises chase yield,” the report said.
A tipping point for the sector could be a long time coming as well, with research by PYMNTS showing that just 9% of consumers use FinTechs as their main bank, while 47% report hesitancy about using digital-only financial players.