Shawbrook eyes £5bn Starling merger instead of IPO
Shawbrook Group is weighing up a £5bn merger with fintech giant Starling, in a move that would be emblematic of a tougher outlook on stock market listings.
The mid-cap lender has reached out to Starling in the last two months to initiate talks on a potential deal, as reported by Sky News.
The proposal remains “highly preliminary,” sources told Sky, and did not go into details about the terms of a transaction.
Whilst there are no active discussions between the two firms, Shawbrook has left opportunities open for Starling to return with a formal offer, reports said.
The lender’s inclination for a merger as opposed to a listing marks another blow for the embattled London Stock Exchange.
The LSE faced an exodus last year, with 88 firms either ditching their listing or transferring away from London as a primary market.
Many firms, including fellow fintech Zopa Bank, have being vocal about the lack of appeal in public markets, given the chaos caused by President Donald Trump’s erratic trade agenda.
Shawbrook explored potential mergers in 2023
Shawbrook’s profit before tax fell to £294m in the 2024 financial year. This was down from £302m in 2023.
But, the firm did manage to boost its deposit and loan book, driven by commercial and retail markets.
The bank’s loan book grew 16 per cent to £15.2bn in 2024, compared to the £13.3bn recorded in 2023.
The lender, which is controlled by private equity firms BC Partners and Pollen Street Capital, will be set to fuel a new batch of speculation around consolidation of Britain’s mid-sized banks.
Shawbrook explored a potential merger with Metro Bank in 2023, when the latter faced a critical point of financial distress.
The same year, the bank plotted a £3.5bn merger with Co-operative Bank, which instead completed its sale to Coventry Building Society at the beginning of 2025.