Starling’s FY26 Profit Dips Again as Neobank Provisions for More Credit Losses
May 21, 2026 – 9:15 am
The Goldman-backed UK challenger has booked a second consecutive annual decline as it takes additional expected-credit-loss provisions, on top of the FY25 fallout from the BBLS Covid-loan compliance issue and the FCA’s £29m anti-money-laundering fine.
Key Takeaways:
- Starling Bank’s Annual Profit Falls Again: The bank’s pre-tax profit fell for the second year in a row, following a 26% drop in 2025.
- FY25 Baseline: Compared to £223.4m in 2025, the new numbers reveal additional provisions against BBLS (Bounce Back Loan Scheme) Covid-loan exposure.
- Additional Provisions: The FY26 results incorporate forward-looking loss reserves for a tranche of BBLS loans that didn’t comply with guarantee requirements due to historical fraud checks.
- Lending Book Composition: Starling’s lending book comprises retail mortgages, BBLS legacy positions, and growing commercial-SME books.
- Positive Metrics: Despite the credit loss provision, customer accounts grew by 10% YoY to 4.6m, and deposits reached £12.1bn.
- Leadership Change: Raman Bhatia, who joined as CEO in March 2024, led the company through the BBLS clean-up and FCA fine fallout for two consecutive reporting cycles.
Raman Bhatia, formerly of OVO and HSBC’s UK/European digital retail bank, emphasizes that the additional provisions are a one-off legacy adjustment rather than a structural issue in the underlying lending book.
The FY26 release reflects decisions made under Bhatia’s tenure as CEO, following Anne Boden’s resignation from the board in 2024.
This announcement comes against the backdrop of recent moves by established UK banks like HSBC and Standard Chartered, signaling shifts in their strategies toward China and AI-driven cuts.