Sept 10 (Reuters) - Britain's Starling Bank is preparing

a secondary share sale that could value the digital lender at up

to 4 billion pounds ($5.42 billion), the Financial Times

reported on Wednesday, citing people familiar with the matter.

The company is said to have approached investment banks,

including Morgan Stanley ( MS ) and Rothschild, to run the sale

process.

Both Starling Bank and Morgan Stanley ( MS ) declined to respond to

Reuters' requests for comment.

Starling, founded in 2017, is considering a listing in New

York as part of its expansion plans in the United States, a

media report said in July.

The bank recorded 714 million pounds in revenue and 223

million pounds in pre-tax profit for the year ended 31 March,

its annual report showed.

($1 = 0.7386 pounds)

(Reporting by DhanushVignesh Babu and Unnamalai L in Bengaluru;

Editing by Shinjini Ganguli)