Starling Bank, one of the UK’s largest mobile-only banks, is looking to buy a nationally chartered bank in the US to continue the firm’s expansion in the market, according to a person with knowledge of the matter.
The London-based company is initiating talks to hire US bankers this summer to begin the acquisition process, with a particular focus on firms located on the East Coast with assets of around $2 billion, according to the person, who asked not to be identified discussing information that isn’t public.
Starling made its first foray into the US earlier this year when it announced it would make its banking technology available in the market and registered a subsidiary in Delaware. The goal is to buy a bank with digital offerings that are outdated and could be improved with Starling’s modern banking technology, the person said.
A spokesperson for Starling declined to comment.
The move may be easier to make now than it would’ve been during Joe Biden’s presidency, when regulatory scrutiny stymied deals, particularly among banks. Aside from mergers and acquisitions, financial-technology companies may pounce on the opportunity to obtain banking charters amid lighter regulation under President Donald Trump’s administration.
The US has had a robust fintech sector for many years, with its peak occurring during the pandemic, followed by lower company valuations and less funding. Fintechs have rebounded somewhat more recently, with Circle Internet Group Inc. and Chime Financial Inc. making their trading debuts earlier this month and Ramp raising $200 million in funding.
Starling Chief Executive Officer Raman Bhatia took over the top role last year after founder Anne Boden exited the job in 2023. Soon after Bhatia joined Starling, the company was fined £29 million for its allegedly lax handling of risky customers between September 2021 and November 2023.
Among Starling’s UK competitors, Revolut Ltd. and Monzo Bank Ltd. have yet to acquire US bank licenses, while OakNorth agreed earlier this year to buy Birmingham, Michigan-based Community Unity Bank.
Source: Mint