One of Britain’s most valuable digital lenders has withdrawn its application for an Irish banking licence, signalling a shift in its international expansion strategy.

Sky News has learnt that Starling Bank told its 2,000 employees on Monday that it had ended a four-year process aimed at launching a retail bank in Ireland.

In a memo to staff, seen by Sky News, Starling founder and chief executive Anne Boden said the company had opted to pursue other projects that would deliver a superior return.

“Sometimes changing course is the right option,” she wrote.

“My job as CEO is to constantly test our thinking against evolving circumstances and to make sure that we are delivering value and maximising potential for growth.

“Ultimately, we felt that an Irish subsidiary would not deliver the added value we are seeking.”

Starling has been focused on rolling out its software-as-a-service platform, Engine, and utilising surplus capital to acquire portfolios of mortgage assets.

Interest rates could top 2% in the next year, Bank of England policymaker says

More than 40,000 BT workers to begin strike action at the end of July, union says

Union calls for maximum workplace temperature in UK amid red warning for extreme heat

It was recently valued at £2.5bn after the injection of new capital from investors.

The company now has more than 3m customer accounts, including nearly 500,000 with SMEs.

Its growth has been questioned in recent months, however, by Lord Agnew, the former Treasury minister, who has criticised Starling’s handling of loans made under emergency Covid schemes.

People close to Starling said it was more likely to pursue the acquisition of a European bank to obtain a licence than apply for a licence in each new market, which can often be a protracted process.

“We’ll now be focusing on taking our software to banks around the globe through our Software as a Service subsidiary, Engine, and by expanding our lending across a range of asset classes, including through targeted M&A activity,” Ms Boden wrote in her memo.

Starling announced its intention to secure an Irish banking licence in 2018, although the process was temporarily paused during the pandemic.

A spokesperson for Starling, which will publish full-year results later this week, said: “This was the right decision for Starling at this time.”

Related posts:

Chip shortage throws spanner in works as car industry struggles to recover from COVID crisis Energy crisis: The blame game has begun – but are some of the claims just hot air? Energy emergency, electric taxis and Britain’s newest bank Ryanair counts cost of Omicron-driven ‘sudden downturn’ in bookings PM’s supply chain tsar urges overhaul of UK infrastructure cap Wizz Air eyes UK-led recovery as growing costs hit bottom line Banks and asset managers vie to carve up £1bn mortgage platform Kensington Sunak defends handling of COVID support scheme and vows to go after loan fraudsters P&O Ferries to restart cross-Channel sailings for tourists US hedge fund sues London Metal Exchange for $456m over ‘irrational’ nickel trading decision Petrol prices keep climbing to new record – adding 0.6p in 24 hours Rangers FC, JD Sports and Elite Sports fixed kit prices, competition watchdog says