UK-based digital lender Starling Bank has abandoned its plans to obtain an Irish banking licence, Sky News has reported.
According to the publication, the digital bank told its employees that it has withdrawn its banking licence application, which would have seen it launch a retail bank in Ireland.
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In an internal memo, Starling Bank founder and CEO Anne Boden stated that the bank has decided to pursue other goals that would deliver a higher return.
“Sometimes changing course is the right option,” Boden was quoted by the publication as saying.
“My job as CEO is to constantly test our thinking against evolving circumstances and to make sure that we are delivering value and maximising potential for growth.
“Ultimately, we felt that an Irish subsidiary would not deliver the added value we are seeking.”
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By GlobalDataAccording to people close to the bank, it is more likely to buy a European bank to obtain a licence.
Founded in 2014, the digital lender is said to have two million users and around 350,000 business accounts.
In April this year, the lender raised an additional £130.5m as part of an internal fundraising round at a $3.3bn (£2.5bn) valuation.
The bank has also been working to roll out its software-as-a-service platform, Engine and using the excess capital to build a mortgage asset portfolio.
In her memo, Starling chief said: “We will now be focusing on taking our software to banks around the globe through our software-as-a-service subsidiary, Engine, and by expanding our lending across a range of asset classes, including through targeted M&A activity.”
The intention to secure a banking licence was first announced in 2018 but the process took a backseat during the pandemic.
“This was the right decision for Starling at this time,” a starling spokesperson was quoted by the publication as saying.
