Starling Bank has experienced a substantial drop in annual profits, falling 25% from £301 million to £223 million, largely due to self-acknowledged failures in its administration of the government’s Covid-19 “bounce back loan” scheme and a significant regulatory fine. The bank has taken responsibility for £28 million in BBL losses, stating its own “weak controls” made them ineligible for taxpayer guarantees.
The controversy surrounding Starling’s approach to the BBL scheme, which offered 100% taxpayer-backed loans, has simmered for years. Starling’s recent internal review confirmed that a segment of these loans bypassed proper vetting, meaning the bank must now absorb the losses rather than relying on government support. This comes in addition to a £29 million fine for inadequate financial crime controls.
These combined financial setbacks have significantly impacted Starling’s bottom line. The bank’s leadership is now considering executive remuneration adjustments and is heavily investing in strengthening its risk management and compliance frameworks to prevent future lapses and ensure sustainable growth.