Starling's profits drop by 25% as it takes blame for loans loss

The digital bank Starling has suffered a 25% drop in annual profits and said it would turn down government guarantees on £28m of Covid loans losses after conceding its own weak controls were to blame.

- Kalyeena Makortoff

The admission stirs up a long-running controversy over Starling's handling of the government-backed bounce back loan scheme, which was built to get money quickly to small businesses during lockdown.

The scheme offered loans of up to £50,000 at 2.5% interest but carried little risk, with taxpayers picking up 100% of losses if firms defaulted.