Starling Bank eyes acquisition to grow SME lending
Starling Bank will “probably” acquire a lending platform within the next year or two, its chief executive has revealed, as the challenger bank seeks to grow its small- and medium-sized enterprise (SME) loan originations.
Speaking at the LendIt Fintech Europe 2020 virtual conference in October, chief executive Anne Boden said that Starling Bank is rapidly expanding the SME side of its business and SME loans now make up the largest segment of its overall book.
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“We’ve grown very fast,” she said. “And despite the fact that we’re growing our own originations, we’re always going to look out for something to acquire and we will probably acquire something in the next year or two.”
She also pointed out that Starling has approximately £3.6bn of deposit funding at the moment, thanks to this growing customer base.
“We do our own lending and we’re doing government-backed lending but also funding other organisations both in the non-bank sector and in the peer-to-peer sector,” she said.
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“And in those sectors, there’s a real absence of funding at present. But we have an appetite for that and we have very slick processes to actually work with these organisations, provide them with funding, take those assets onto our books and then together we can serve the market more effectively.
“You have stress in the P2P market, but as a bank that has access to funding and government schemes and liquidity, that is a huge advantage.”
Starling already has existing partnerships with P2P lenders Funding Circle and Zopa.
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