The head of Revolut, a financial technology industry giant based in the United Kingdom, Nikolay Storonsky, said he was optimistic about the prospects that this company would receive a banking license from the UK authorities.
The mentioned expectations, in which there is no fear or uncertainty about the future, are largely based on the fact that the number of clients of the firm has increased significantly and its profit before tax for the whole year has reached an all-time high.
Nikolay Storonsky expressed his confidence in the positive decision to grant the company a banking license from the regulators of the United Kingdom during a conversation with media representatives. It is worth noting that Revolut has been moving towards the corresponding goal for more than three years, overcoming various obstacles.
Nikolai Storonsky noted that regulators are still working on a decision on granting a banking license, but at the same time underlined that they had no serious concerns about the activities of the fintech giant. He stated that due to Revolut’s huge size, it took longer to make the move towards the mentioned license compared to the similar experience of smaller companies.
Nikolai Storonsky drew attention to the fact that the standard regulatory practice established in the United Kingdom stipulates that banking licenses are usually granted to small firms. Also, within the framework of this practice, such approval decisions are most often made twice a year.
Revolut currently has the legal status of a licensed electronic money institution in the United Kingdom. The corresponding status does not provide for the opportunity to carry out activities related to offering credit products to consumers of financial services, including credit cards, mortgages, and personal loans. Obtaining a banking license will allow Revolut to issue loans in the United Kingdom. The company applied for the mentioned license back in 2021. The decision-making process turned out to be very difficult. In this case, the most significant problem was the discrepancy between the structure of Revolut shares with the rulebook of the Prudential Regulation Authority, which is the regulatory body for the financial services industry that sits under the Bank of England.
The company has several classes of equities, some of which in the past were attached by privileged rights. The Bank of England said that the firm should collapse six classes of its shares into ordinary shares. The company solved this problem by concluding a deal with Japanese technology investor SoftBank to transfer equities to a single class, giving up privileged rights. The relevant information was published by the media with reference to insiders.
In 2023, the fintech giant’s pre-tax profit amounted to 438 million pounds ($545 million). It is worth noting that in 2022, a loss of 25.4 million pounds was recorded. Revolut’s revenue for 2023 amounted to 1.8 billion pounds, demonstrating an increase of 95% year-on-year.
Victor Stinga, the company’s chief financial officer, says that the mentioned results are largely due to a record increase in the size of the customer base. In 2023, this figure grew by 12 million clients.
As we have reported earlier, Revolut Plans Share Sale.
