Revolut to clinch UK bank licence in weeks

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

Britain’s largest monetary expertise agency – which is valued at £27.6 billion – has been making an attempt for greater than two years to acquire approval from regulators.

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

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

The figures, audited by BDO, are anticipated to present that Revolut achieved its first full-year revenue in 2021 as revenues soared. An replace on present buying and selling will present that turnover jumped once more in 2022.

The accounts will obtain a last sign-off tomorrow and are due to be revealed on Wednesday, The Mail on Sunday understands.

Russia-born Storonsky, who favours open collars and denims over the standard banker’s go well with, can be chief govt.

Smaller rivals together with Monzo and Starling have already got UK banking licences.

Revolut is among the largest names in British tech and has been championed by Chancellor Jeremy Hunt, who just lately praised it as a ‘shining’ success as he set out his imaginative and prescient of the UK as ‘the world’s subsequent Silicon Valley’.

The enterprise, which began out providing pre-paid foreign money change playing cards, now has 25 million prospects worldwide and operates in greater than 200 nations and areas. It has additionally been on an enormous hiring spree, taking up about 300 employees a month since final summer time and boosting its complete headcount from 2,900 at the beginning of 2022 to about 6,000 now.

But it has additionally confronted accusations of an aggressive company tradition, which has reportedly pushed out some employees.

The firm’s City veteran chairman Martin Gilbert helped it safe a Lithuanian banking licence after becoming a member of in 2020.

In the UK it has been regulated as an digital cash establishment, which restricts the merchandise it could possibly present. Storonsky is aiming for the group to develop into the ‘Amazon of banking’.

Customers can at the moment open an account through its app and obtain a debit card. Other companies and merchandise embrace international change, pet insurance coverage and vacation residence leases. Users also can commerce cryptocurrencies, inventory and gold on the app.

Gaining a UK banking licence would enable it to maintain buyer deposits and to lend cash – which is changing into extra profitable as rates of interest rise.

Banking licence purposes want to be authorised by two regulators, the Financial Conduct Authority and the Bank of England’s Prudential Regulation Authority.

Revolut has rocketed in worth in current years from £1.8 billion in 2018 to a staggering £27.6 billion valuation in a fundraising spherical in 2021, which briefly made it larger than NatWest.

If it secures a banking licence, analysts imagine it may very well be price much more.

Fintech companies noticed their valuations plunge final yr, nonetheless, due to widespread fears a few of them had been wildly overvalued.

When the licence is granted, Revolut is known to have volunteered to spend up to a yr in a ‘mobilisation’ part – in impact a dry run to ensure that its techniques are working correctly.

This is predicted to final about 9 months, so prospects would have the ability to use the brand new companies from early 2024.

The firm’s accounts had been initially due in September 2022. This was prolonged till the top of December, however that deadline was additionally missed.

The exact motive for the delay is unknown. However, Revolut has reportedly been beneath stress to tighten its inside controls after the UK’s accountancy regulator the Financial Reporting Council (FRC) discovered flaws in BDO’s audit.

The FRC stated there was an ‘unacceptably excessive’ threat of misstatements.

In July 2022, the FRC stated that solely 58 per cent of the BDO audits it had inspected had been deemed up to scratch.

Revolut declined to remark.