Troubled fintech giant Revolut offered to withdraw UK banking licence application
Fresh bank licence turmoil for Revolut: Troubled fintech giant offered to withdraw UK application amid fears it will be rejected
Revolut has offered to withdraw its application for a banking licence in the UK, the Mail can reveal.
With speculation mounting that the Bank of England was set to reject its two-year bid for approval, the fintech giant is understood to have asked officials if it should abandon its efforts.
But it received reassurances that the process was ongoing and its application was still being considered – even after its auditor said parts of its overdue accounts were ‘materially mis-stated’.
The revelations follow more than two months of turmoil at Revolut since executives suggested it would be granted a licence ‘imminently’, possibly within days.
The company’s impatience appeared to boil over earlier this month when Revolut boss and co-founder Nik Storonsky lamented the ‘long and tiring process’, and warned Britain was an undesirable place to do business.
Mixed fortunes: Revolut, co-founded by Nik Storonsky (pictured), is understood to have asked officials if it should abandon its efforts to obtain a banking licence
But the outburst prompted criticism from observers, with one analyst warning that throwing a ‘tantrum’ would not help Revolut secure a licence.
Last night, it emerged Bank of England regulators were planning to reject the application.
According to the Telegraph, the Bank’s Prudential Regulation Authority (PRA), responsible for licences, told the Treasury in March that Revolut’s initial application would be turned down within weeks because of concerns over its balance sheet.
That would be a crushing blow for the company which has been trying since 2021 to win approval from regulators so it can expand its services in Britain into taking deposits and giving loans.
Licence applications need to be approved by two regulators – the Financial Conduct Authority (FCA) and the PRA.
However, this statutory warning notice has not yet been handed to Revolut, and the tech firm is now in urgent talks to rescue its hopes for a licence.
Once a statutory warning notice is handed down, a company has up to a month to challenge it.
Experience: Fund management veteran Martin Gilbert is Revolut’s chairman
Beyond that, a final notice of the decision is sent.
Revolut was once the UK’s tech darling, hailed as a ‘shining’ success by Chancellor Jeremy Hunt.
It attracted City heavyweights such as fund management veteran Martin Gilbert, who is Revolut’s chairman.
But fortunes have since turned and a rejection would add to the long list of injuries incurred by Revolut so far this year, including a slew of senior members of staff exiting the company.
Finance boss Mikko Salovaara stepped down earlier this month for ‘personal reasons’ while its UK banking chief James Radford resigned in March and the group chief operating officer Michal Laube left in February.
Salovaara’s departure came just two months after the group published its financial accounts.
These showed that the company turned a profit in 2021 but its auditor BDO issued an alert that a chunk of its revenues may have been ‘materially mis-stated’.
This included three-quarters of its £636million revenue in 2021, which BDO said it could not independently verify.
At the time, Salovaara insisted that Revolut was on course to obtain a UK banking licence ‘any day now’.
The Mail understands Revolut now hopes to produce an unqualified audit opinion from BDO in three months’ time.
In a statement, the company said: ‘We have agreed with the Bank of England we won’t comment on an ongoing banking licence application.’
The Bank of England and the FCA declined to comment.