Ministers rule out Revolut intervention in battle for a UK banking licence

Ministers will not intervene to salvage Revolut’s faltering application for a UK banking license, the Mail has been told.

The payments app has been hailed by Chancellor Jeremy Hunt as a ‘shining example’ of Britain’s ‘global fintech sector’.

But more than three months after it was announced that an announcement about his banking license was imminent, it doesn’t look like it will be reached.

And a well-placed government source told the Mail: “Not everyone who applies for the permit gets one. Ministers have no role.’

Revolut’s application for a banking license is being examined by the Prudential Regulation Authority (PRA) – part of the Bank of England – and the Financial Conduct Authority (FCA).

At the same time, Hunt has made no secret of his admiration for the company and its founder Nik Storonsky, who was pictured alongside him at an event earlier this year.

The chancellor said last month that while regulators must remain independent, it is important for them to “understand their broader responsibilities for economic growth.”

That will be enshrined in law when the Financial Services and Markets Bill comes into effect in a few weeks.

It will place a duty on regulators to take into account the UK’s growth and international competitiveness, and report regularly on how well they are achieving this.

But the Mail has been told that Revolut is not seen in government as a test case for that commitment. If regulators decide they don’t want to license the company, they will likely recommend that the application be withdrawn.

But Revolut could decide to go ahead and, if denied, appeal the decision. The company was optimistic when it said in March it thought a UK banking license would be granted ‘soon’.

Those comments came as it published delayed full-year results for 2021, recording a first-ever profit of £26m and tripling sales to £636m. But things quickly began to unravel.

Accountant BDO said £477m in revenue – three quarters of the total – could not be verified and may have been reported incorrectly.

The fallout from that revelation then seemed to have sparked a rift, with Revolut lashing out at ‘misreporting’ the auditor’s opinion, only for the Financial Times to report that some independent board members considered that an ‘overreaction’.

Then in April, fund giant Schroders cut the valuation of its stake in Revolut from £10.1m to £5.4m, implying the company was worth around £14bn, just over half its previous valuation of around £10m. 26 billion.

Meanwhile, the Telegraph reported that the PRA told the Treasury in March that it intended to reject Revolut’s application, but the notice was not served and there were subsequently urgent behind-the-scenes talks to try and salvage it.

The lengthy application all became too much for 38-year-old Storonsky, who told the Times last month it was a “long and exhausting process” while ranting against tax and bureaucracy and saying his company would never consider getting into it. walk in London.

And in a pot shot to regulators, he said, “You wait months for emails or letters. This is not the business environment to operate in the modern world.”

In another blow, Mikko Salovaara, Revolut’s chief financial officer, quit “for personal reasons.”

Martin Gilbert, the city’s president and chairman of Revolut, was scheduled to meet with the PRA last week to try to resolve the impasse over the application.

A Revolut spokesperson said: “We are not commenting on pending license applications.”