Starling Bank reported that its gross loan book was down 4.1% to £4.7bn in contrast to a 12 months in the past, due to reductions amongst closed mortgages and government-backed pandemic-era enterprise loans.
However, the loan book at its landlord enterprise, Fleet Mortgages, jumped 50.7% to £2.3bn within the 12 months to the tip of March, regardless of “contractions” within the buy-to-let market and “a turbulent rate of interest atmosphere”.
The digital financial institution stated this rise was offset by a fall of 28.2%, or £0.9bn, at its closed mortgage portfolios and the run-off of government-backed Covid-era lending programmes, such because the Coronavirus enterprise interruption loan scheme.
Mortgages account for 81.7% of lending on the group, up from 70.5% a 12 months in the past, in its annual accounts revealed right this moment.
However, the financial institution stated pre-tax revenue jumped 54.7% to £301.1m, pushed by development in income, deposits, lively prospects and buyer transactions.
Revenue lifted 50.6% to £682.2m, whereas whole deposits have been up 4% to £11bn.
But the financial institution, led by interim chief govt John Mountain, added it continued to be “pessimistic concerning the financial outlook for the UK”.
It stated: “The outlook stays difficult within the UK due to ongoing uncertainty relating to the residual affect of the price of dwelling on affordability, which is anticipated to lead to growing loan steadiness arrears and low development.”
The enterprise identified that its “modelling is extra pessimistic than the prior 12 months with anticipated muted gross nationwide product development, greater rates of interest for longer, and stickier core inflation”.
The lender is known to be dedicated to a future London Stock Exchange flotation, however has not set out a timeframe for publicly promoting its shares.
Starling purchased Fleet Mortgages in July 2021 for £50m in money and shares.
