Raman Bhatia is preparing to stand down as chief executive of Starling Bank after just two years in the role, as the UK digital bank struggles with slowing growth. Bhatia has privately told the board he no longer wants to run the fintech, according to three people familiar with the matter, and the board has stepped up succession planning in response.
Bhatia was named chief executive in March 2024 after founder Anne Boden clashed with investors over the bank's ailing valuation growth. Boden, a former Allied Irish Bank executive, founded Starling in 2014 as one of a crop of digital-only challenger banks. Last month it emerged that she had sold the last of her stake at a valuation of just £1.7bn, well below the £4bn secondary share sale the bank was planning last year.
Financial pressures have deepened. Revenues slid 6 per cent to £887mn in the year to March, while pre-tax profits dropped 3 per cent to £217mn as lower Bank of England base rates weighed on interest income. The bank has also been hamstrung by restrictions imposed in 2021 by the Financial Conduct Authority over its poor financial-crime controls, which blocked new accounts for high-risk customers. The FCA later accused it of "shockingly lax" controls and fined it £29mn. Bhatia said in May that Starling was exiting these restrictions.
Starling's Engine software platform is seen as crucial to its future. Launched in 2022, it lets lenders design and build their own digital banking operations and is used by banks in Australia, New Zealand, Romania and Canada. Starling Bank declined to comment.
Source: Financial Times Companies · Summarized by HeadlinesBriefing