Latest news with #RamanBhatia
FF News
02-06-2025
- Business
- FF News
Starling Reports Strong Revenue and Invests for Growth
Starling Group today published its financial results for the twelve months ending 31 March 2025 (FY25), showing strong growth in revenue, customer numbers and deposits. This performance positions the Group well as it prepares to launch new retail and SME banking propositions, announce more international Engine by Starling clients, and create more than a thousand jobs. FY25 Highlights: Revenue rose to £714 million, up from £682 million the previous year, demonstrating a continued robust performance across all business lines. Customer deposits reached a record £12.1 billion, up from £11.0 billion the previous year, demonstrating growing confidence in the bank and its services. Open accounts reached a new high of 4.6 million, a 10% increase from 4.2 million in the prior year, indicating continued customer acquisition success. Profit before tax decreased to £223 million as the Group recognised one-off costs relating to two legacy matters. Underlying profit before tax was £281million. The Group's capital surplus has grown by 40% to over £400 million. Raman Bhatia, Group Chief Executive, said: 'These results represent an important milestone, marking the Group's fourth consecutive year of profitability and revenue growth. This performance derives from our commitment to providing customers with innovative banking solutions and exceptional service. We are particularly pleased with Starling Bank's success in attracting new customers, as evidenced by the continued growth in our deposit base and open accounts.' 'In the last year we demonstrated our commitment to addressing legacy matters, investing in our people and capabilities so we now move forward from a position of strength. We will leverage our robust capital position to continue to scale our growth in the UK by helping our customers become better with money. We will also make great strides in turning Engine by Starling into a global success.' Declan Ferguson, Group Chief Financial Officer, added: 'The Group generated an underlying profit before tax of £281 million. Our revised capital requirements were communicated in April, taking our total surplus capital to more than £400 million in excess of our buffers; a 40% increase on last year. In the coming months, we'll be deploying this capital across Starling Bank, Engine and other international ventures to fuel our growth.' Group company contributions During the year, Starling Bank continued to innovate with new features, such as 'call status indicators,' which help customers spot bank impersonation scams, and low balance warnings when a customer's main balance drops below a pre-set threshold. The bank also launched its Easy Saver, which offers a competitive interest rate payable on balances up to £1 million, with penalty-free access and full integration into the Starling app. Engine's first Software-as-a-Service clients, Salt Bank in Romania and AMP Bank in Australia, launched their digital banking platforms during the year, contributing £8.7m (2024: £2.3m) to the Group's fee income. Engine is building a strong pipeline that could see it achieve recurring revenues in excess of £100 million in the short to medium term. Fleet, the Group's buy-to-let mortgage company, continues to be a successful acquisition. Fleet's lending grew by 33%, or £0.8 billion, reaching £3 billion. Mortgages grew to represent 90% of total gross lending, reflecting the Group's focus on a secured lending growth strategy. We continue our mission to be the lender of choice in the specialist buy-to-let market. Overall, net fees and commissions, including fees from Engine, grew by 12% year-on-year to £94.8 million, underscoring the Group's strategy of diversifying its sources of revenue and reducing its dependency on net interest income. Regulatory update As reported in October, the bank settled a £29.0 million fine from the FCA relating to the onboarding of certain high-risk customers in contravention of agreed restrictions and sanctions screening processes. Through extensive investment in resources and expertise relating to financial crime, Starling Bank has an established risk management and control framework that will support a new phase of safe, sustainable growth. The bank also recognised a £28.2 million provision related to the voluntary removal of the government guarantee on a limited number of loans issued under the Bounce Back Loan Scheme (BBLS), which the bank determined may not comply with the guarantee requirement. This proactive step further evidences Starling's commitment to addressing legacy matters.
Yahoo
01-06-2025
- Business
- Yahoo
Starling pays out fivefold bonus sum despite FCA fine and Covid loan errors
Starling Bank has handed its staff an almost fivefold increase in bonus pay despite an embarrassing regulatory fine and losses on government-backed Covid loans that the digital lender has blamed on its own weak controls. The digital-only challenger bank paid out £24.6m in bonuses for the 2024-25 financial year, compared with £5.3m a year earlier. Starling's annual report showed the bank's remuneration committee approved a £600,000 bonus for its highest-paid director – believed to be the chief executive, Raman Bhatia – taking their total pay packet to £1.7m. It paid another £5.4m in bonuses to Starling's board members. The increase in the overall bonus pot – which paid out in both cash and shares – followed a difficult year for Starling, which was blighted by embarrassing revelations about the bank's internal controls. The bank reported last week it was taking a £28m loss on its Covid-era bounce back loans (BBLs) after conceding it had lent money to some businesses without proper checks. This meant the loans were unlikely to qualify for the 100% government guarantee, which would have meant taxpayers footed the bill. Starling was fined £29m by the Financial Conduct Authority in Octoberafter the watchdog discovered 'shockingly lax' financial crime controls at the bank. The FCA said Starling, which emerged in the mid-2010s, had 'left the financial system wide open to criminals and those subject to sanctions'. The fine and loan losses ate into the bank's annual profits, which tumbled 25% to £223m for the year to the end of March. Starling said the latest bonus pot did not take either the FCA fine or the Covid loan losses into account, given that they were 'legacy issues' that did not reflect the staff's recent performance. 'It is important to note that the scheme reflects performance over the past 12 months, which includes the effective management of legacy matters, progress against key regulatory programmes, and the group's broader commercial performance,' a spokesperson said. They added that a larger number of staff were taking part in its bonus schemes, which included a long-term incentive plan that was paid out in Starling shares. Bhatia told journalists last week that the bank might consider cutting or clawing back pay from executives over the FCA fine and Covid loan issue. 'We have discharged our duties to consider any impact on [remuneration] where appropriate. I can't share any further details,' Bhatia said. It was not clear whether that could impact Starling's founder and former chief executive, Anne Boden, who stepped down in 2023 citing a 'conflict of interest' between being a boss and a large shareholder in the bank. Bhatia took the helm midway through 2024. Sign in to access your portfolio
The Guardian
01-06-2025
- Business
- The Guardian
Starling pays out fivefold bonus sum despite FCA fine and Covid loan errors
Starling Bank has handed its staff an almost fivefold increase in bonus pay despite an embarrassing regulatory fine and losses on government-backed Covid loans that the digital lender has blamed on its own weak controls. The digital-only challenger bank paid out £24.6m in bonuses for the 2024-25 financial year, compared with £5.3m a year earlier. Starling's annual report showed the bank's remuneration committee approved a £600,000 bonus for its highest-paid director – believed to be the chief executive, Raman Bhatia – taking their total pay packet to £1.7m. It paid another £5.4m in bonuses to Starling's board members. The increase in the overall bonus pot – which paid out in both cash and shares – followed a difficult year for Starling, which was blighted by embarrassing revelations about the bank's internal controls. The bank reported last week it was taking a £28m loss on its Covid-era bounce back loans (BBLs) after conceding it had lent money to some businesses without proper checks. This meant the loans were unlikely to qualify for the 100% government guarantee, which would have meant taxpayers footed the bill. Starling was fined £29m by the Financial Conduct Authority in Octoberafter the watchdog discovered 'shockingly lax' financial crime controls at the bank. The FCA said Starling, which emerged in the mid-2010s, had 'left the financial system wide open to criminals and those subject to sanctions'. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion The fine and loan losses ate into the bank's annual profits, which tumbled 25% to £223m for the year to the end of March. Starling said the latest bonus pot did not take either the FCA fine or the Covid loan losses into account, given that they were 'legacy issues' that did not reflect the staff's recent performance. 'It is important to note that the scheme reflects performance over the past 12 months, which includes the effective management of legacy matters, progress against key regulatory programmes, and the group's broader commercial performance,' a spokesperson said. They added that a larger number of staff were taking part in its bonus schemes, which included a long-term incentive plan that was paid out in Starling shares. Bhatia told journalists last week that the bank might consider cutting or clawing back pay from executives over the FCA fine and Covid loan issue. 'We have discharged our duties to consider any impact on [remuneration] where appropriate. I can't share any further details,' Bhatia said. It was not clear whether that could impact Starling's founder and former chief executive, Anne Boden, who stepped down in 2023 citing a 'conflict of interest' between being a boss and a large shareholder in the bank. Bhatia took the helm midway through 2024.
Forbes
28-05-2025
- Business
- Forbes
U.K. Fintech Starling Bank Says ‘Historic Weaknesses' Caused Profit Drop
Starling Bank's CEO Raman Bhatia speaks at the Fintech Summit in Lisbon, Portugal. (Photo By Ramsey ... More Cardy/Sportsfile for Web Summit via Getty Images) Starling Bank managed to report its fourth consecutive year of profitability and revenue growth on Wednesday, although the fintech's 'legacy matters' weighed heavily on its bottom line. The bank said its pretax profit for the financial year fell to £223 million ($300 million), an almost 26% drop from a year earlier that was largely attributed to a regulatory fine for inadequate financial crime controls and a provision to cover issues with Covid-era loans. Starling was fined £29 million by the Financial Conduct Authority (FCA) in October after it had repeatedly breached an agreed requirement not to open accounts for high-risk customers. The watchdog said at the time that the bank's anti-money laundering controls and sanctions screening systems left the financial system "wide open to criminals." Starling also said it recognized a £28 million provision during the financial year after it voluntarily removed the government guarantee on some of the loans it had issued under the Bounce Back Loan Scheme (BBLS). The BBLS was a government-backed program launched in May 2020 that was aimed at helping small businesses exposed to the economic shock caused by the pandemic. The scheme allowed banks to quickly lend businesses up to £50,000 at low interest rates and with a 100% state guarantee. More than £46 billion in loans had been disbursed by various lenders through the scheme, according to the Department for Business and Trade, but the agency also admitted there had been more than 100,000 cases of loss due to fraud and error. The government's decision to streamline the loan process meant that it had "limited verification and no credit checks on borrowers, which made it vulnerable to fraud and losses," according to the National Audit Office. Starling's revenue growth slowed considerably last year. The bank's turnover rose 4.7% to £714 million, compared to a 51% jump in revenue that Starling posted in its 2024 fiscal year. Starling's Chairman David Sproud characterized the bank's latest results as 'a resilient financial performance amid challenging markets and as we resolved some important legacy matters." Founded in 2014 by veteran banker Anne Boden, Starling has grown rapidly as it aims to take on traditional banks with a mobile-only offering. Starling is one of a pack of digital banks, often described as neobanks or challenger banks, that emerged over the past decade and grabbed market share from legacy lenders. The likes of Starling, Monzo and Revolut have been attracting millions of customers with user-friendly apps and low fees. Starling was granted a banking license by the Bank of England in 2016. Boden stepped down as CEO in 2023, saying at the time she wanted to avoid any potential conflicts of interest with her stake in the fintech. Starling was approached by Shawbrook, another challenger bank, about a possible £5 billion merger earlier this year, Sky News reported in April. The approach was described as "highly preliminary," and did not involve any details about the proposed deal. Starling didn't comment on the prospects of a merger on Wednesday, but it did point to its Engine unit, which sells software to other companies, as a source of future growth for the bank. 'Our ambition is global, and with Engine we are now poised to bring our proprietary technology to a global addressable market of some £100 billon,' Starling CEO Raman Bhatia said. 'In the coming year we will expand Engine's unique Software-as-a Service (SaaS) proposition to new markets in North America and the Middle East.'
Yahoo
28-05-2025
- Business
- Yahoo
Starling's profits dip 25% as bank takes blame for Covid loan losses
Digital bank Starling has suffered a 25% drop in annual profits and announced it would turn down government guarantees on £28m of Covid loans losses after conceding its own weak controls were to blame. The admission stirs up a long-running controversy over Starling's handling of the government-backed bounce back loan (BBL) scheme, which was built to get money quickly to small businesses during lockdown. The scheme offered loans of up to £50,000 at 2.5% interest but carried little risk, with taxpayers picking up 100% of losses if the companies defaulted. On Wednesday, Starling's chief executive, Raman Bhatia, said the bank had proactively reviewed some of the BBLs on its books, and conceded that a tranche of loans had been granted to applicants without proper checks. That meant they were unlikely to qualify for government guarantees, which might have otherwise seen taxpayers foot the £28m bill. 'In some cases, we think we may not have met all the procedures, all the requirements, of the scheme,' Bhatia told journalists during the conference call. He did not confirm whether Starling had discovered fraud or financial crime within that tranche of loans. It comes just months after Starling was hit with a separate £29m fine for 'shockingly lax' financial crime controls, which the City regulator said had left the financial system 'wide open to criminals and those subject to sanctions'. Together, the fine and BBL loss reduced Starling's profit for the year to March to £223m, down 25% from £301m a year earlier. Bhatia said the bank may consider cutting or clawing back pay from executives if appropriate. 'We have discharged our duties to consider any impact on [remuneration] where appropriate. I can't share any further details.' It is not clear whether that might impact Starling's founder and former chief executive, Anne Boden, who stepped down in 2023 citing a 'conflict of interest' between being a boss and a large shareholder in the lender. Starling's distribution of Covid loans gained heightened attention in 2022 when former minister Theodore Agnew accused Starling of using the BBL scheme as a 'cost-free marketing exercise to build their loan book and so their company valuation', and failing to properly review borrowers before handing out taxpayer-backed loans. Boden at the time vehemently denied Agnew's claims. Unlike large lenders, Starling opened BBL applications to new clients and saw its client base swell as a result. Its business customer base grew from 87,000 to 330,000: equivalent to adding 15,000 a month. And while the bank had only issued £23m of its own loans before the pandemic in November 2019, it had distributed £1.6bn in BBLs by the time the scheme closed in March 2021. Commenting on the Financial Conduct Authority (FCA) fine and the BBL loss on Wednesday, Starling's chief financial officer, Declan Ferguson, said: 'We continue to make significant investment into our financial crime resource to ensure our risk management and compliance capabilities are commensurate with the high-growth business and experience. 'Working closely with both the FCA and the British business bank, we have also sought to limit the impact of these issues and ensure they remain one-offs, but now we are now more confident we are moving forward into the next stage of our growth on much stronger foundations.' Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
