Starling Bank profits ease as SaaS platform Engine delivers strong growth

Starling Bank has reported softer group profits and revenue for its latest financial year, even as its banking-as-a-service subsidiary Engine posted a strong revenue increase and expanded its client base.

The UK-based digital bank, which now serves more than six million customers, released results for the year ending March 2026 that highlight the impact of lower interest rates on its core banking income, alongside continued growth in customer numbers, deposits, and technology licensing.

Lower interest income weighs on group results

For the year to March 2026, Starling’s pre-tax profit slipped by around 3 percent to £217 million. Group revenue also declined, falling from £940 million in the previous year to £887 million.

The bank attributed the decline primarily to reduced interest income. Interest earnings fell from £882 million to £759 million, reflecting the effect of lower interest rates over the period. This pressure on interest margins offset gains elsewhere in the business.

Customer growth and higher deposits

Despite the fall in profit and revenue, Starling continued to grow its customer base and activity levels. Total transaction volume increased from £197.1 billion to £216.7 billion during the year, pointing to higher usage of its accounts and payment services.

The bank also reported a rise in average deposits. The average deposit balance per customer climbed 7.9 percent to £4,241, supporting the bank’s funding base even as interest income narrowed.

Across the group, the number of customer accounts grew from 5.3 million to 6.2 million over the year. Starling said that a majority of its business customers and a significant share of its retail users now treat it as their main banking provider: 56 percent of its small and medium-sized enterprise (SME) customers and 32.5 percent of its retail customers use Starling as their primary bank.

Engine SaaS platform gains momentum

Starling’s technology arm, Engine, delivered some of the strongest growth within the group. Engine, a software-as-a-service platform created as a Starling subsidiary in 2022 and employing around 300 people, more than doubled its client roster to four institutions during the year.

Revenue at Engine rose 25 percent year-on-year to £10.9 million, underlining demand from other financial institutions for Starling’s underlying banking technology.

During the reporting period, Engine signed a new 10-year agreement with Tangerine, a subsidiary of Canada’s Scotiabank. The deal marks Engine’s first client in North America and broadens Starling’s international technology footprint.

Focus on profitability and global scaling

Commenting on the results, chief executive Raman Bhatia highlighted that Starling has now recorded five consecutive years of profitability while continuing to invest in growth areas such as customer engagement in the UK and the global rollout of its technology platform.

The combination of a growing customer base, higher deposits, and a scaling SaaS business suggests that Starling is positioning itself both as a full-service challenger bank in its home market and as a technology provider to other financial institutions worldwide, even as changing interest rate conditions weigh on short-term earnings.