Regulators under pressure over Revolut

Watchdogs are under pressure to decide Revolut’s future, experts warned last night.

Speculation is mounting over the fintech company’s fate.

The London-based firm – once seen as the darling of the sector – has been seeking a UK banking licence for more than two years.

The application has become increasingly mired in controversy amid growing frustration at Revolut over the drawn-out process.

One City analyst warned there was now ‘a lot of pressure on regulators’ and urged them to be ‘very careful’.

Licence applications need to be approved by two regulators – the Financial Conduct Authority (FCA) and the Bank of England’s Prudential Regulation Authority (PRA). Rivals Monzo and Starling have secured licences and the process usually takes about a year.

But Revolut’s chances suffered a setback in early March when its auditor said parts of its overdue accounts were ‘materially misstated’.

At the time, the company insisted it would still be granted a licence ‘imminently’, possibly within days, but nearly three months later it is still waiting.

In the meantime, finance chief Mikko Salovaara has stepped down for ‘personal reasons’ while other senior figures have also left. Revolut’s impatience appeared to boil over earlier this month when boss and co-founder Nik Storonsky lamented the ‘long and tiring process’ and warned Britain was an undesirable place to do business.

But the outburst prompted criticism from observers, with one analyst warning that throwing a ‘tantrum’ would not help Revolut secure a banking licence.

Speculation over its fate intensified this week when it emerged the PRA had told the Treasury it was minded to reject its application for a banking licence.

Failure to get a licence from its home regulators could seriously dent its ambitions to expand overseas. Revolut is understood to have offered to withdraw from the UK, asking regulators if it was not wanted here. But it got reassurances that the process was ongoing and its application was still being considered.

Dame Angela Eagle, Labour MP and a member of the Commons Treasury committee, said regulators must take their time with the licence process.

Gary Greenwood, investment analyst at Shore Capital, said: ‘There is a lot of pressure on regulators if this goes wrong, so they need to be very careful.’

The Bank and the FCA declined to comment on the application process.

A Revolut spokesman said: ‘We do not comment on ongoing regulatory applications. We’re a British company and London is our home.’