Anne Boden will step down as Starling’s boss to avoid potential conflicts of interest

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Starling Bank founder Anne Boden stepped down as chief executive officer in a surprise announcement that said she removed any potential conflicts of interest from her being a significant shareholder in fintech.

Boden, which owns 4.9% of the bank she founded in 2014, said she would step down at the end of June after discussions with the board over the risk of conflict. You said you started those talks about six months ago.

“Modern governance is about the board setting strategy and the CEO executing it,” Boden said on Thursday. “As the majority shareholder, that’s very difficult to do if you’re also the CEO.”

He added that UK regulators had not increased his stake in the bank as an issue.

Boden is the latest in a long line of UK fintech bosses to leave their positions, including Tom Blomfield, who founded rival Monzo, and Wise co-founder Taavet Hinrikus, who isleft the post of president of the payment company to strengthen its governance in view of its public listing in 2021.

Chief Executive John Mountain will take over as interim chief executive officer when Boden leaves, he said Transferas it reported a record six-fold increase in pre-tax profits to £195m in the year to March 2023, while revenue more than doubled to £453m.

Mortgage growth helped drive results, with total mortgage lending reaching £3.4bn, up from £1.2bn in the same period last year. Starling acquired buy-to-let mortgage provider Fleet Mortgages in July 2021 and the loan portfolio of specialist lender Masthaven last June.

Chief Financial Officer Declan Ferguson said Starling will bring an additional mortgage product to market in the coming months.

Like other lenders, Starling’s results were helped by rising interest rates. The Bank of England raised interest rates to 4.5% in May, the highest level since 2008, as it fights persistent inflation.

Starling’s net interest margin – the difference between the interest received on loans and the rate paid on deposits – increased 145 basis points to 2.72%.

Boden also said that while the bank was still trying to go public, he would wait until the challenging macroeconomic environment stabilized.

“The IPO markets are closed and we don’t really know when they will reopen,” he added. “Starling has always thought that its counterparts, the big banks, are publicly traded and therefore we probably need to be publicly traded just like them, but we are in no rush.”

Boden said last July that Starling was thinking about an IPO “maybe [in] 2023, probably 2024”.

The company last secured a £2.5bn price tag in April 2022 after a £130.5m funding round from existing investors, significantly smaller than UK-based fintech Revolut Kingdom, which was rated at 33 billion dollars in its latest funding round in July 2021, or Monzo, valued at 4.5 billion dollars in December 2021.

Starling’s default listing location would be the UK, Boden added. London’s limited ability to keep local tech companies planning to go public has been a source of consternation, with Financial Conduct Authority proposal radical changes to the listing scheme in May.