Central Bank of Ireland officials had clearly signalled to UK-based Starling Bank that they were preparing to approve the digital bank’s plan to set up in the Republic and use it as a launchpad into other EU countries before the lender decided on Monday to pull from the process, according to sources.
While a number of financial firms, both active in the State and looking at the market, have privately complained in recent years about difficulties in securing Irish approval for new activities, a spokeswoman for Starling Bank said the U-turn “had nothing to do with the regulatory regime”.
Ms Boden, a former chief operating officer at AIB, told staff at the UK challenger bank on Monday that Starling had withdrawn its application for a banking licence from the Central Bank, four years after initiating the process.
Starling will now focus on taking its software to banks around the globe through its software-as-a-service unit, which aims to help banks with their digital transformation plans, and on expanding its lending across a range of asset classes in its home UK market, including through targeted deals.
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While the Irish project was temporarily put on hold during the pandemic, it was subsequently revived.
* Ms Boden said that while the bank had “successfully completed” an initial phase of applying for an Irish licence and was invited to file a final application, Starling had “concluded that market conditions and the bank’s own expansion plans mean that securing an Irish banking licence is no longer a top priority” and that it had decided not to proceed to the final stage.
Multiple sources had said that Central Bank officials had clearly indicated that the application was on track to be successful.
The privately owned firm, which turned profitable on a monthly basis in October 2020, was last valued at £2.5 billion (€2.9 billion) in April, double what it was worth in a 2021 financing round.
The bank’s backers include Goldman Sachs, Qatar Investment Authority and Fidelity.
*This article was edited on July 21st, 2022 to clarify that Starling had been invited to file a final application
