The founder of Starling Bank, Anne Boden, is to step down as chief executive in a surprise move that she said was designed to shield the online bank from potential concerns over a conflict of interest, because she is a major shareholder.
Boden, who launched the bank in 2014, said on Thursday that the “roles and priorities” of a shareholder and chief executive “ultimately differ” and that, to ensure there was “no potential conflict”, she would give up her executive role next month but remain on the board as a non-executive director.
The former Royal Bank of Scotland and Allied Irish Banks (AIB) executive – who was paid £1m last year – said discussions over her departure began six months ago.
However, her shareholding has fallen over the past 12 months from 5.6% to 4.9%, leaving her with 18.5% of the voting rights. In 2015, a year after Starling’s launch, Boden held a 51% stake.
She stressed that the decision to step aside after nearly a decade was her own, rather than having been prompted by concerns by UK regulators or the board.
“Now that we have grown from being an aspiring challenger to an established bank, it is clear the roles and priorities of a CEO and a large shareholder ultimately differ and require distinct approaches,” she said. “As Starling continues to evolve and grow, separating my two roles is in the bank’s best interests.”
The announcement came as Starling, which has 3.6 million customers, announced it had more than doubled its revenues to £453m for the year to March 2023, helping it report its second straight year of annual profits. Pre-tax profits grew six-fold to £195m from £32m a year earlier.
Starling, last valued at £2.5bn, will temporarily be led by its chief operating officer, John Mountain, while the bank carries out an “international search” for Boden’s permanent replacement.
The company has grown significantly since the pandemic, having acquired buy-to-let mortgage lender Fleet, and it has grown its loan book in part through the government-backed Covid loan scheme.
However, last year Boden was forced to defend the bank’s handling of the Covid loans – which are covered by taxpayer cash if customers default – after the zformer minister Lord Agnew claimed Starling had not done enough to prevent fraud and used the scheme as a “cost-free marketing exercise to build their loan book and so their company valuation”.
Boden has strongly rejected Agnew’s claims, accusing him of defamatory statements, and said the bank had introduced extra checks for customers around the scheme.
Boden grew up in Swansea, Wales, where her father was a steelworker and her mother worked in a department store. She spent nearly 30 years working in finance before launching Starling, originally called Possible Financial Services, selling her house to help fund the venture.
Boden confirmed that Starling still aimed to list on the stock exchange, but had put the plan on pause given the depressed appetite from investors on financial markets. “The IPO market is closed,” Boden said.
She said a London listing would be the “default situation” for the bank, but that the lender would “need to keep our options open”.
“The big banks are listed and we therefore see we have to be listed just like our peers … however there’s no hurry,” the outgoing boss added.
Her comments will come as a relief to government ministers, who are concerned that the City is at risk of losing out on new stock market listings to rival jurisdictions such as the US.
Earlier this month, the boss of rival Revolut, Nikolay Storonsky, threatened to list his company in the US rather than London due to what he said were high taxes and “an extremely bureaucratic regulator”.
Boden said she could not comment on Revolut, which is still waiting for a UK banking licence two years on from its application.
