Yahoo Finance Starling sets its sights on IPO amid interest from big lenders
Starling Bank has said it is still eyeing up an initial public offering (IPO) amid reports that banking giants Lloyds Banking Group (LLOY.L) and JP Morgan (JPM) were interested in the company.
The British startup challenger bank, founded in 2017, said that a stock market listing was “still in our sights.”
It came as the Times earlier revealed that American bank JP Morgan was looking to snap up the company, while Lloyds had its eye on its technology, after it opened a data room as part of a plan to raise £200m ($266m) in new funding.
If the bank purchase was to go through, it could lead to the first big merger of an established lender with a start-up in Britain, the newspaper said.
However on Saturday, Starling reiterated that founder and chief executive Anne Boden has always said she will “never sell to a big bank.”
Earlier this month Starling revealed that its profit of £800,000 in October made it “the first of the new breed of digital banks to become profitable” as its customer numbers continue to rise.
It said it has generated £9m of revenue for the month, representing an annualised run rate of £108m.
The company, whose main shareholders include Bermuda-based Harry McPike and Merian Global investors, rivals other digital banks such as Monzo and Revolut, which have recently posted record large losses.
READ MORE: Reignited rivalry between Monzo and Starling divides UK tech
As of last month, Starling had 1.42 million retail accounts, up from 827,000 accounts the year before. It has also more than doubled its business accounts to 256,000. It was boosted earlier this year as it was accredited to lend government-backed Bounce Bank and coronavirus business interruption loans.
Meanwhile, JP Morgan is getting ready to launch a consumer bank in the UK next year.
The news comes as HSBC (HSBA.L) is mulling a complete exit from retail banking in the US after narrowing the options for how to improve performance at its struggling North America business, the Financial Times revealed on Saturday.
Senior management are looking to present the plan to the bank’s board in the coming weeks, the newspaper said, citing people familiar with the matter.
The retreat from its operations in America, and move towards more profitable businesses in Asia, would mark the end of the bank’s 40-year long attempt to run a full-service, universal bank in the country.
One of the sources told the FT: “The jury is still out… we are examining the financial viability of the cost and the reward of exiting or having a middle strategy where we keep a smaller presence.”
Watch: What is the Bounce Back Loan scheme?
