- Revolut swung to loss as it failed to reveal when it would secure banking licence
- Financial app business posted a pre-tax loss for the year of £25.4m
- Group’s bottom line was dented by rising costs, which surged to £667m
Revolut swung to a loss last year as it failed to reveal when it would secure a banking licence.
In its delayed accounts for 2022 published yesterday, the financial app business posted a pre-tax loss for the year of £25.4million, down from a £39.8million profit in 2021.
The group’s bottom line was dented by rising costs, which surged to £667m from £380million in 2021 as its workforce more than doubled.
It also took a £17m hit in the first quarter of the year after a payments system flaw allowed criminals to siphon millions from its corporate accounts.
The accounts also revealed that Revolut’s highest-paid director, thought to be chief executive Nik Storonsky, saw pay jump to £17.8million from £10.3million in 2021. Most of this consisted of share-based payments.
The losses came despite revenues at the group jumping 45 per cent to £923million as it added over 9.8million new customers to its books. The firm also forecast revenues of £1.7billion for this year.
But Revolut failed to provide any updates on the status of its all-important application for a UK banking licence, with Storonsky, 39, simply saying the group remained ‘committed’ to securing the permit.
The company also did not provide a timeline on its application despite it being nearly 300 days since it said it was expected to be granted a licence ‘imminently.’
The ongoing failure to secure a licence has been a pain point for the fintech firm, which suffered a series of embarrassing setbacks this year.
The delays are also causing nervousness among investors, with one key backer previously telling the Mail they were becoming ‘impatient.’
Revolut applied for a licence from the Bank of England in 2021, which would allow it to expand its services in Britain into taking deposits, making loans and offering credit cards.
It was thought the process would take about two years. But nearly three years on, it is still wading through demands from the central bank’s Prudential Regulation Authority. When its long-delayed accounts for 2021 were published in March, Revolut’s then-chief financial officer Mikko Salovaara insisted the licence would be granted imminently. But he quit in May for ‘personal reasons’.
No update: Revolut failed to provide any updates on the status of its all-important application for a UK banking licence
The delays to the licence application sparked an outburst from Storonsky. He branded Britain an undesirable place to do business. City analysts, however, dismissed his comments as a ‘tantrum’ and ‘sour grapes’.
Revolut’s numbers also came under intense scrutiny after auditor BDO revealed it was not able to independently verify three-quarters of its £636m revenue, saying that some information may be ‘materially misstated’.
BDO once again issued a qualified opinion in its assessment of the latest 2022 accounts.
But the auditor stressed previous issues around Revolut’s controls had been ‘resolved’ and that it had been able to ‘obtain sufficient appropriate audit evidence’ for the annual figures.
The results were also published days before an end-of-year deadline, which was extended from the end of September at the company’s request. It is the second year in a row that Revolut has failed to publish its accounts on time.
The ongoing questions over the banking licence are also piling pressure on Revolut chairman Martin Gilbert, a former head of asset manager Abrdn.
Gilbert said that despite a ‘challenging landscape, 2022 was an excellent year for Revolut’.
The financier is among several financial bigwigs the company has brought in to bolster its reputation.
