Troubled fintech giant Revolut offered to withdraw UK banking licence application
New banking licensing turmoil for Revolut: Distressed fintech giant offered to withdraw UK application amid fears it will be rejected
Revolut has offered to withdraw its application for a UK banking license, the Mail can reveal.
With speculation mounting that the Bank of England would reject its two-year bid for approval, the fintech giant is said to have asked officials whether it should abandon its efforts.
But it was assured that the process was ongoing and the application was still pending — even after the auditor said parts of the delinquent accounts contained “material misstatements.”
The revelations follow more than two months of turmoil at Revolut as executives suggested it would be licensed “soon,” possibly within days.
The company’s impatience seemed to boil over earlier this month when Revolut boss and co-founder Nik Storonsky lamented the “long and tiring process” and warned that Britain is an undesirable place to do business.
Mixed fortunes: Revolut, co-founded by Nik Storonsky (pictured), reportedly asked officials whether it should abandon its efforts to obtain a banking license
But the outburst sparked criticism from observers, with one analyst warning that throwing a “tantrum” wouldn’t help Revolut secure a license.
It emerged last night that Bank of England regulators intended to reject the application.
According to the Telegraph, the Bank’s Prudential Regulation Authority (PRA), responsible for licensing, told the Treasury in March that Revolut’s initial application would be rejected within weeks due to balance sheet concerns.
That would be a crushing blow to the company which has been trying since 2021 to gain regulatory approval so it can expand its services in Britain into taking deposits and lending.
License applications must be approved by two regulators: the Financial Conduct Authority (FCA) and the PRA.
However, this legal warning has not yet been handed to Revolut and the tech company is now in urgent talks to salvage its license hopes.
Once a legal warning has been issued, a company has up to one month to challenge it.
Experience: Martin Gilbert, a fund management veteran, is the president of Revolut
After that, a final notification of the decision will be sent.
Revolut was once the UK’s tech darling, hailed as a ‘brilliant’ success by Chancellor Jeremy Hunt.
It attracted City heavyweights such as veteran Revolut chairman Martin Gilbert.
But things have since turned and a rejection would add to the long list of injuries Revolut has suffered so far this year, including a slew of senior staff who have left the company.
CFO Mikko Salovaara resigned earlier this month for “personal reasons”, while UK bank chief James Radford stepped down in March and the group’s chief operating officer Michal Laube left in February.
Salovaara’s departure came just two months after the group released its financial accounts.
This showed that the company made a profit in 2021, but that the accountant issued a warning to BDO that some of its income may have been reported ‘materially incorrect’.
This included three-quarters of the £636 million turnover in 2021, which BDO says it could not independently verify.
At the time, Salovaara insisted that Revolut was on track to get a UK banking license “any day”.
The Mail understands that Revolut now hopes to issue an unqualified audit opinion from BDO in three months’ time.
In a statement, the company said: “We have agreed with the Bank of England that we will not comment on an ongoing banking license application.”
The Bank of England and the FCA declined to comment.