LONDON, Jan 13 (Reuters) – Fintech firm Revolut Ltd. is
close to finalising its long-overdue 2021 financial accounts, a
move that could pave the way for the start-up to obtain a UK
banking licence, two people with knowledge of the matter told
Reuters.
Revolut is set to publish financial accounts for the year
ended December 2021 – which were due last summer – at the end of
January after auditing firm BDO LLPs final sign-off, the people
said. BDO and Revolut plan to meet on Jan. 26, the people said.
Founded by Nikolay Storonsky, a former derivatives trader at
Credit Suisse Group AG and Lehman Brothers, and software
developer Vladyslav Yatsenko in 2015, Revolut launched as a
prepaid card charging foreign-exchange fees that undercut
established banks.
It was valued at around $33 billion in the last known
funding round in 2021, making it then Britain’s most valuable
start-up.
The audit firm’s sign-off comes after months of delays.
The Financial Times reported in September that the Financial
Reporting Council (FRC), a U.K. body responsible for regulating
auditors, found Revolut’s BDO audit inadequate and said that
the risk of an undetected material misstatement was
unacceptably high.
The watchdog’s scrutiny of the 2020 audit held up approval
for Revoluts 2021 accounts, one of the people said. Revolut
will retain BDO for the 2022 audit, that person said.
Representatives for BDO, FRC and the Bank of England’s
Prudential Regulatory Authority, which approves banking
licences, declined to comment.
The Revolut filing will likely show a rise in 2021 revenue
from clients subscriptions and exchange rate fees, the person
said. It is unclear how profitable the company will be after
losing 200 million pounds the previous year.
Storonsky said in November that the firm was profitable and
that did not need to raise further funds.
The accounts may help the entrepreneur to convince UK
regulators that Revolut is ready for a banking licence after a
two-year wait.
To win it, Revolut also needs the consent of the Financial
Conduct Authority (FCA), according to regulatory guidance.
Revolut is likely to opt for an “authorization with
restriction”, where it will operate with limits on customer
deposits before becoming fully operational as a bank after a
trial period, the same person said.
It will not be the first start-up to go down that route.
Starling Bank and Monzo also received banking licences with
restrictions in 2016. For Monzo, it took about eight months to
have the restrictions lifted.
Britain is a key market for Revolut, which aims to become a
global financial firm. The company is already using its
Lithuanian license as a passport into the European Union.
(Reporting by Stefania Spezzati; Editing by Elisa Martinuzzi
and Tomasz Janowski)
