Delayed accounts could deal heavy blow to Revolut bank licence bid

With over 25 million customers in over 200 countries and a value of £27 billion, online bank Revolut has been the toast of the fintech scene in recent years.

With celebrity promotions involving heavyweight boxer Anthony Joshua and YouTube stars Sidemen, it has grown rapidly since its launch in 2015.

But the council is on alert after the London-based financial ‘super app’ failed to file its latest annual accounts on time.

Revolut became the UK’s most valuable private technology company in a £650 million 2021 funding round, backed by top investor Masayoshi Son’s Softbank and New York-based Tiger Global.

That brought the valuation to a level comparable to that of established banks such as Barclays and NatWest.

Moscow-born founder Nikolay Storonsky, 38, had an estimated net worth of £5.2 billion last year.

High-profile names brought on board include City Delegate Martin Gilbert, who is chairman, and ex-Labor Secretary Kitty Ussher, who is chief economist at the Institute of Directors.

Revolut started as an app to reduce the cost of sending money abroad. But even then Storonsky made it clear that he had much bigger ambitions.

Today, it offers payment services, crypto trading, savings accounts, and stock trading. In November, it announced plans to move to Brazil, India and New Zealand.

But the prize Revolut is just short of getting its hands on is a banking license in the UK – two years after it applied for one through a process of intense scrutiny. His smaller colleagues, Starling and Monzo, acquired a license in 18 months.

At the moment, Revolut is licensed in Lithuania, which opens access to the European Union. A UK license would mean deposits are covered by the UK Financial Services Compensation Scheme, which protects amounts of up to £85,000. It would also help gain similar accreditations in other markets, such as the US.

Last fall, Storonsky said the application was “going really well,” adding, “We’re almost there.”

The fact that BDO’s accountants have not signed his accounts is probably a source of frustration at what could be a critical time.

Revolut last filed its bills – for the year ending 2020 – in June 2021.

There are indications that the increased scrutiny of accounting firms is causing the slowdown rather than any major concerns about Revolut.

But as Gary Greenwood, banking analyst at Shore Capital, put it, “You have to be very concerned about the prospects of any company that doesn’t file its accounts on time. It certainly won’t help their hopes of a UK banking licence.’

BDO said it would not comment on specific audits but added: ‘Delays can occur for a number of reasons and, as part of our public interest duty to provide an appropriate level of challenge to the companies we audit, we don’t sign bills. until we are completely satisfied with the information and evidence provided.”

The annual accounts are expected to be submitted at the end of January. Revolut said: “Our accounts have been finalized and we expect to confirm the previously reported news that we are profitable.”