By Stefania Spezzati
LONDON (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 LLP’s 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 Revolut’s 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)
