Starling Bank has reported a decline in full-year profits due to exceptional charges related to FCA non-compliance and Covid-era loans.
Although the challenger bank increased its revenue to £714 million for the twelve months ending 31 March 2025—up from £682 million the previous year—profit before tax fell to £223 million, down from £301 million.
In October, the Financial Conduct Authority fined Starling Bank £29 million for deficiencies in its financial sanctions screening. Additionally, the bank has recorded a £28.2 million provision this year after incorrectly applying a Government-backed guarantee to some bounce-back loans during the pandemic.
Customer deposits rose to £12.1 billion, up from £11.0 billion, largely attributed to a leading savings product, while the number of open accounts increased from 4.2 million to 4.6 million.
Despite the bank’s expectations for its Software-as-a-Service strategy to generate future revenue, Engine’s fee income contribution to the group was relatively modest at £8.7 million.