Revolut moves closer to UK banking license after resolving audit issues

Revolut chief Nick Storonsky previously complained that British «extremely bureaucratic» regulators were putting innovation at risk. Photo: Luke McGregor/Bloomberg

Revolut's battle to win a UK banking license received a boost after auditors said the fintech company had resolved issues around revenue and internal controls.

In deferred annual terms In reports released Friday, the British fintech company said the issue of potentially misstating 2021 earnings had been «addressed» and auditors said they had approved the latest set of figures.

This raises hopes that Revolut can move closer to receiving its long-awaited banking license, which has been suspended since it first applied in January 2021.

Revolut came under scrutiny earlier this year after BDO issued warnings over revenue on its books of almost £477 million.

At the time, auditors said earnings «may be materially misstated» due to weaknesses in internal systems.

However, Revolut said in its report that the latest results show that this obstacle has now been removed.

The fintech company's latest financial statements showed a loss for the year of £25.4 million, compared with a profit of £39.8 million in 2021.

This was driven by rising costs offsetting a windfall from higher interest rates as revenues rose 45% to £922.5m.

Despite reviewing Revolut's accounts, BDO said there were still potential issues regarding the «comparability» of earnings. revenue figures between 2021 and 2022.

Nick Storonsky, chief executive of Revolut, said the firm “remains committed” to applying for a UK banking license.

The company received an extension to its 2022 reporting deadline after submitting its 2021 data several months late.

Revolut has waited more than two years to obtain a banking license, which would allow it to carry out more regulated activities such as mortgage lending and credit cards.

The Telegraph reported in May that the Bank of England was considering rejecting Revolut's application for a banking licence.

Threadneedle Street has told Revolut it must issue a set of accounts with an unqualified audit opinion and simplify its share structure before the license is issued.

Victor Stinga, Revolut's chief financial officer, said the company has «since addressed these gaps» and is working with BDO to «conduct extensive testing of both the design and effectiveness of our controls.»

He said , : “While these historical events have had an impact on the timing of publication of these financial statements, we can now return to the normal reporting schedule from the next cycle.”

Mr Storonsky previously complained that the UK was “extremely «bureaucratic» regulators risk innovation.

Despite investors valuing the company at £24 billion, several backers have written down the value of their stakes in the company amid a wider sell-off. fintech shares.

Revolut's results showed it doubled its workforce to 6,000 last year and also grappled with a card payment fraud problem that cost the company £17 million.

Mr Storonsky's salary jumped significantly over the year, from £10 million in 2021 to more than £17.8 million.