UK Modern Banks: The "Big Two" Battle for Supremacy (and Profit)

In the first part of our Financial Health Check series, we looked at the VFX industry’s struggle for stability. This week, we pivot to a sector that has finally found its footing: UK Digital Banking.

For years, the headlines were dominated by user growth numbers and valuation hype. But in 2025, the game has changed. It is no longer about who has the most customers; it is about who has the best business.

We analysed the latest data for Monzo, Starling Bank, Revolut, and Atom Bank. While all four are now profitable (a massive milestone for the sector), the real story is the divergence between the two UK heavyweights: Starling’s efficiency vs. Monzo’s scale.

Starling vs. Monzo: Two Paths to Profit

If you look at just one metric—turnover—you might think Monzo has won. But if you look at "health," the picture gets much more interesting.

1. The Turnover Gap

Monzo has officially become a giant. With £1.2 billion in turnover for 2025, they have nearly double the turnover of Starling (£714m). Monzo’s strategy of capturing the mass market (12m+ customers) has paid off in raw volume.

2. The Efficiency Flip

However, profit is where Starling shines as the "Top Dog" of financial health.

Despite having half the turnover of Monzo, Starling generated significantly more efficient returns. Starling’s Net Profit sat at a robust £150m (statutory), driven by a lean cost base and high-margin lending. Monzo, while now impressively profitable at £87m (adjusted), is still running a much more expensive machine to service its massive user base.

The takeaway? Starling makes more money from less "noise."

The "War Chest": Becoming Your Primary Bank

The most critical shift in 2025 is that users stopped treating these apps as "spending cards" and started trusting them with their life savings.

Look at the Total Liabilities (which for banks, equals customer deposits). Both banks have seen vertical growth here, but Monzo’s social dominance has allowed it to amass a staggering £17.3bn in deposits, compared to Starling’s £14.6bn.

This "free float" of customer cash is the rocket fuel that is finally allowing both banks to lend profitably.

The Outliers: Global Giants and Niche Snipers

While the "Big Two" fight for the UK high street, two other players are winning their own games on the sidelines.

Revolut: The Global Behemoth

Revolut is simply playing a different sport. With £2.5bn+ in turnover and nearly £700m in profit, they aren't just a UK bank; they are a global financial super-app. Their challenge remains regulatory complexity, but purely on financials, they are a monster.

Atom Bank: The "Lean Machine"

Atom Bank proves you don't need 12 million customers to be healthy. They have the highest Productivity (Turnover per Employee) of the entire group, peaking at over £800k per head. By focusing strictly on high-value lending (mortgages) and keeping headcount low (~500 staff), they have built a sustainable, highly efficient fortress.

The Verdict: Health Scores

So, who is the healthiest?

• Starling Bank (Score: 82): The "Adult in the Room." High margins, stable profits, and consistent growth make it the current benchmark for financial health.

• Revolut (Score: 74): The "Powerhouse." Incredible cash generation, but higher volatility and operational complexity.

• Atom Bank (Score: 69): The "Sniper." Highly efficient, low risk, but limited ceiling compared to the giants.

• Monzo (Score: 67): The "People's Champion." Growing the fastest and rapidly improving its health, but still carrying the weight of a massive operational cost base.

  
  

Winner: Starling Bank retains the crown for now, but Monzo’s sheer momentum suggests the gap is closing fast.

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