Starling Group has reaffirmed its “very committed” stance on future plans for a London stock market listing.

The online bank noted that higher interest rates contributed to an annual profits surge by 55%. The interim chief executive of the bank, John Mountain, disclosed that although the board and shareholders are regularly discussing plans for an initial public offering (IPO), no final decision regarding the timeline has been decided yet.

In possibly diverging from recent trends of firms opting for overseas stock markets for their IPOs or switching their listings abroad, he added that London would be the “natural home” of any potential flotation. Mountain said: “A number of shareholders’ investment strategies are based around a public-private approach.”

He continued: “The timing we need to look at, but we’re very committed to that. We’ve always been very much a UK tech business and the London Stock Exchange would be a natural home for us,” Mountain confirmed.

Furthermore, Mountain revealed that Starling’s soon-to-be-in-post permanent chief executive Raman Bhatia, formerly the boss of gas and electricity supplier Ovo Energy, will provide updates on potential listing plans after he assumes his role on July 24.

Mountain proudly proclaimed Starling as no longer just a contender in the banking scene, but a “thriving established bank”. This affirmation comes as the digital lender reported pre-tax profits jumping by 54.7% to £301.1million for the year ending March 31 marking its third consecutive profitable year.

UK interest rates have “provided a strong tailwind” to Starling Bank’s net interest margin, which soared to 4.34% from 2.72%, according to Mr Mountain. He revealed that the bank is expanding its banking software, Engine, on a global scale, with ambitions for it to potentially eclipse the retail banking division in the future.

Last year, Starling Bank secured Salt Bank in Romania and AMP Bank in Australia as the inaugural customers for its Engine platform. Mountain announced: “It was a breakthrough year for Starling as we became a global provider of banking software as a service through our subsidiary Engine by Starling.”

He expressed confidence in the investment in Engine, stating: “We’ve heavily invested in Engine because we’re confident it can one day become as big as the UK bank, or bigger.”

The latest figures from Starling show an increase in impairment provisions to £47million from £34.5million the previous year, citing a “very modest” uptick in arrears, primarily in mortgage lending, along with a slight rise in default rates on unsecured small business loans.

Starling observed a deceleration in deposit base growth to 4%, reaching a total of £11billion, amidst fierce competition as clients search for the best savings rates. The bank also reported a decrease in overall gross lending to £4.7billion from £4.9billion as it scales back the government-backed business loan portfolio established during the pandemic.

Anne Boden, who founded Starling in 2014, made headlines last May when she stepped down as the chief executive of the bank. She remarked it was “in the bank’s best interests” to divide her responsibilities as chief executive and as a significant shareholder.

Mountain, who previously served as chief operating officer, took over on a temporary basis in June last year. The company has a workforce of about 3,500 staff spread across offices in London, Southampton, Cardiff, and Manchester.