Starling Chief Executive Won't Budge on IPO Pledge -- Financial News

By Emily Nicolle and Ryan Weeks

Of Financial News

Starling Bank chief executive Anne Boden has been steadfast in her resolve never to put the fintech firm up for sale, as she continues to angle toward an eventual IPO for the bank.

Reports emerged over the weekend that traditional banking stalwarts JPMorgan Chase & Co. and Lloyds Banking Group PLC have "expressed interest" in acquiring Starling, which a spokesperson for the startup quickly dismissed.

Exactly what these "expressions of interest" amount to is unclear from the reports in question, but Ms. Boden poured more cold water on the claims while speaking with Financial News at a conference Monday.

The Starling founder reiterated that she had no interest in taking up any past, present or future offers.

"Big banks taking interest in Starling is not new," she said. "I've always said that I didn't do this to sell to a big bank, and nothing's changed. We still have our sights on an IPO."

Ms. Boden also said this wasn't the first time she'd been approached by a U.S. bank about signing a deal, with the rumors having suggested JPMorgan was interested in acquiring Starling as part of plans to set up a consumer bank in the U.K.

Lloyds, meanwhile, was reported by the Times to be after Starling's technology. Ms. Boden believes this to be the young bank's main appeal for traditional lenders considering a bid for its business, particularly now that Starling has reported its first profitable month since it gained a bank license in 2016.

"People are looking at Starling and thinking, you know, wow, they built their own technology. They took a really, really difficult route. They decided to get a banking license, pursue the right customer base, to build the right technology, and now it's paying off. I'm very excited about that."

While Lloyds didn't respond to a request for comment on the report, the person in charge of transforming its retail efforts Stephen Noakes said the lender has set aside roughly 3 billion pounds ($4 billion) for investing in the lender's strategy. A spokesperson for JPMorgan declined to comment.

Ms. Boden has always positioned Starling as a rival to the banks on the high street, despite constant comparisons to its digital peers Monzo and Revolut. But in recent months, that rhetoric has changed in favor of emphasizing Starling's appeal as a technology company--perhaps in an effort to boost the bank's price tag as it attempts to secure $200 million from investors.

So what part of the FTSE index might Starling fall under if it goes public? Technology with the likes of Micro Focus international PLC and Softcat PLC, or finance alongside its reported suitors?

"I think in future, all banks will end up being considered far more as a technology stock," Ms. Boden said. "I think that banks are not glamorous at the moment. I think investors look at banks and think they're very, very hard work. Technology has all the glamour at present."

"But I'm a realist. The only way you can make money and actually have a sustainable business is if you're a bank, and you have the best technology in the world. And that is what we set out to do, and that's what we're doing."

However, don't expect anything concrete on an IPO to appear from Starling any time soon. Ms. Boden wouldn't be drawn on a potential timeframe for a listing, nor how the bank's (undisclosed) private valuation might be altered by becoming profitable.

"We don't need to raise [to cover] our operating costs now. If we did have to raise--and I'm not saying that we're raising--it would be to grow our balance sheet and our European operations. Once you're profitable, you know, hopefully our profits will cover all our costs and we don't need to raise further just to keep going, which gives us a huge amount of independence."

Website: www.fnlondon.com

(END) Dow Jones Newswires

December 01, 2020 08:20 ET (13:20 GMT)

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