Fleet Mortgages, the buy-to-let (BTL) mortgage lender and subsidiary of Starling Bank, saw originations rise by 50.7% to £2.3bn in the year to 31 March 2024.
Starling Bank’s financial report said this rise offset a 28.2% or £900m reduction in the group’s closed mortgage portfolios and run-off government-backed lending.
As a result of the rise in Fleet Mortgages’ BTL business, mortgages now account for 81.7% of Starling Bank’s lending, compared to 70.5% in the previous year.
The digital bank said its total mortgage lending rose from £3.4bn to £3.8bn.
The value of undrawn mortgage balances, relating to committed future lending through Fleet Mortgages, fell from £146.9m to £125.3m.
Starling Bank noted a rise in the levels of arrears, especially within acquired portfolios, driven by interest rates on legacy variable rate mortgages as well as cost-of-living increases.
However, it said this had been offset by lower arrears in newly originated Fleet Mortgages assets.
The overall volume of loans and advances to borrowers declined by 3.8% to £4.7bn.
Third year of profitability
Starling Bank reported a 54.7% jump in its profit before tax to £301.1m.
This was the third year that the digital bank reported a profit.
Its revenue rose by 50.6% to £682.2m.
John Mountain, interim CEO of Starling Bank, said: “This is our third full year of profitability, demonstrating a robust financial performance. It was a breakthrough year for Starling as we became a global provider of banking software-as-a-service [SaaS] through our subsidiary Engine by Starling. We’ve heavily invested in Engine, because we’re confident it can one day become as big as the UK bank, or bigger.”
Cloud-based banking platform Engine by Starling launched in November 2023.
David Sproul, group chair of Starling, said: “Starling is now an established part of the UK banking scene. The percentage of active accounts now stands at nearly 80%, while total transactions rose by 21% to £174.1bn during the year. We have more customers, using our services more often, continuing to deepen their relationship with us.
“We look forward to welcoming our new group CEO, Raman Bhatia, on 24 June. He brings a wealth of experience in consumer technology, banking and fintech expertise as the group enters its next phase of growth.”
Earlier this year, Fleet Mortgages rebranded to mark its second decade of business. The lender said the change reflected its increased scale and size.
Shekina is the deputy editor at Mortgage Solutions and commercial editor at Mortgage Solutions and Specialist Lending Solutions. She has nearly eight years of experience in the B2B publishing market, having previously covered the hospitality, retail, pet, accounting and jewellery sectors.
Shekina has worked for Mortgage Solutions and Specialist Lending Solutions for almost five years. Here, she covers the market’s breaking news stories, engages with professionals in the sector, and oversees any commercially agreed content in partnership with mortgage-related companies.
This includes presenting webinars and hosting roundtable discussions on developing themes in the mortgage sector.
She is an NCTJ-trained journalist and was nominated for the Headline Money Awards Mortgage Journalist of the Year in 2021.
In her spare time, Shekina likes to read, travel, listen to music and socialise with friends.
She currently reports on current events in the mortgage market and liaises with financial clients to produce sponsored content.
Follow her on Twitter at @ShekinaMS
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