- U.K.-based Starling Bank has withdrawn its application for a European bank license with the Irish central bank, founder and CEO Anne Boden told employees in an internal memo Monday, according to Sky News.
- The Goldman Sachs-backed digital bank decided to end its four-year effort to launch a retail bank in Ireland so it could pursue other projects that will yield higher returns, Boden told staff.
- While the move is a setback for the digital bank’s international retail expansion plans, the bank still plans to expand to Europe through software-as-a-service deals with other lenders, Boden said in the memo.
"Sometimes changing course is the right option," Boden wrote to the company’s 2,000 employees. "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."
Starling has run into previous issues regarding its pursuit of an Irish banking license. The company, which announced plans to obtain the license in 2018, temporarily paused talks with regulators in 2020 due to the COVID-19 pandemic, according to CNBC.
As the company turns its focus to expanding Engine, its software business, Boden said Starling plans to expand its lending across a range of asset classes, including through targeted mergers-and-acquisitions activity.
Starling, which is valued at £2.5 billion ($3 billion), has set aside £400 million ($480.6 million) for acquisitions, the Financial Times reported in April.
A European bank license could still be part of the company’s strategy, however. The company may consider gaining a license through acquiring a European bank, a source told Sky News.
Starling is one of the U.K.’s largest online-only banks, with more than 3 million customer accounts, nearly 500,000 of which are small businesses, according to CNBC.
The digital bank, which launched in 2014, has garnered investment from Goldman Sachs and Qatar’s sovereign wealth fund.