Revolut to clinch UK bank licence in weeks

Revolut to clinch UK bank licence in weeks: £27bn fintech firm set to clear hurdle for regulator’s approval as it publishes late accounts

  • Firm trying for more than two years to gain approval from regulators
  • Path to UK licence cleared by publication of Revolut’s overdue 2021 accounts
  • Figures expected to show that Revolut achieved its first full-year profit in 2021 

Revolut expects to receive its long-awaited UK banking licence within weeks, The Mail on Sunday can reveal.

Britain’s biggest financial technology firm – which is valued at £27.6 billion – has been trying for more than two years to gain approval from regulators.

The path to a UK licence will be cleared by publication of Revolut’s overdue 2021 accounts this week.

It will be a milestone for the group, which was set up in 2015 by former Credit Suisse and Lehman Brothers trader Nik Storonsky, 38, and Vlad Yatsenko, 39.

The figures, audited by BDO, are expected to show that Revolut achieved its first full-year profit in 2021 as revenues soared. An update on current trading will show that turnover jumped again in 2022.

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The accounts will receive a final sign-off tomorrow and are due to be published on Wednesday, The Mail on Sunday understands.

Russia-born Storonsky, who favours open collars and jeans over the traditional banker’s suit, is also chief executive.

Smaller rivals including Monzo and Starling already have UK banking licences.

Revolut is one of the biggest names in British tech and has been championed by Chancellor Jeremy Hunt, who recently praised it as a ‘shining’ success as he set out his vision of the UK as ‘the world’s next Silicon Valley’.

The business, which started out offering pre-paid currency exchange cards, now has 25 million customers worldwide and operates in more than 200 countries and regions. It has also been on a huge hiring spree, taking on about 300 staff a month since last summer and boosting its total headcount from 2,900 at the start of 2022 to about 6,000 now.

But it has also faced accusations of an aggressive corporate culture, which has reportedly driven out some staff.

The company’s City veteran chairman Martin Gilbert helped it secure a Lithuanian banking licence after joining in 2020.

In the UK it has been regulated as an electronic money institution, which restricts the products it can provide. Storonsky is aiming for the group to become the ‘Amazon of banking’.

Customers can currently open an account via its app and receive a debit card. Other services and products include foreign exchange, pet insurance and holiday home rentals. Users can also trade cryptocurrencies, stock and gold on the app.

Gaining a UK banking licence would allow it to hold customer deposits and to lend money – which is becoming more lucrative as interest rates rise.

Banking licence applications need to be approved by two regulators, the Financial Conduct Authority and the Bank of England’s Prudential Regulation Authority.

Revolut has rocketed in value in recent years from £1.8 billion in 2018 to a staggering £27.6 billion valuation in a fundraising round in 2021, which briefly made it bigger than NatWest.

If it secures a banking licence, analysts believe it could be worth even more.

Fintech firms saw their valuations plunge last year, however, due to widespread fears some of them had been wildly overvalued.

When the licence is granted, Revolut is understood to have volunteered to spend up to a year in a ‘mobilisation’ phase – in effect a dry run to make sure that its systems are running properly.

This is expected to last about nine months, so customers would be able to use the new services from early 2024.

The company’s accounts were originally due in September 2022. This was extended until the end of December, but that deadline was also missed.

The precise reason for the delay is unknown. However, Revolut has reportedly been under pressure to tighten its internal controls after the UK’s accountancy regulator the Financial Reporting Council (FRC) found flaws in BDO’s audit.

The FRC said there was an ‘unacceptably high’ risk of misstatements.

In July 2022, the FRC said that only 58 per cent of the BDO audits it had inspected were deemed up to scratch.

Revolut declined to comment.