Revolut's global goal thrown into jeopardy

Revolut’s global ambitions are hanging in the balance as the financial services group struggles to secure a prestigious British banking licence.

The UK’s most valuable fintech firm has been waiting for approval for more than two years – despite repeatedly saying it was on the cusp of getting the green light.

Insiders now fear the difficulties could make foreign regulators nervous and that their decisions will hinge on the outcome of Revolut’s efforts to win over British officials. A final decision on the licence is expected within weeks.

It follows a series of embarrassing setbacks for the company in recent months – including the departure of its finance chief and a warning from its auditor that its delayed accounts may have been ‘materially misstated’.

Frustrations boiled over last week when co-founder Nik Storonsky lashed out at officials, saying it had been a ‘long and tiring’ process and that Revolut would no longer consider a stock market float in the UK.

In the balance: The UK’s most valuable fintech firm has been waiting for approval for more than two years

A senior source close to the firm later said the company was still in talks with UK regulators.

But there were growing concerns about the ‘knock-on effects’ of the troubles in the UK and whether they could damage efforts to win licences abroad.

Revolut had already been rubber-stamped in Europe, through a licence secured in Lithuania, but it has also been eyeing other countries including the US and Singapore.

David Jarvis, the boss of Griffin, a newly authorised UK bank, said Revolut would struggle to gain licences elsewhere if its application was ultimately unsuccessful in the UK. ‘Other regulators will definitely be watching the Bank of England,’ Jarvis said. ‘It is a highly credible and respected regulator.’

Revolut was set up in London in 2015 by former Credit Suisse and Lehman Brothers trader Storonsky, 38, and Vlad Yatsenko, 39.

The group, which started as a pre-paid currency exchange card, now has 28 million customers worldwide and operates in more than 200 countries and regions.

In the UK it has been regulated as an electronic money institution, which restricts what it can provide. But it still offers a range of services.

Customers can open an account via its app and have a debit card.

They can access resources, including foreign exchange, pet insurance and holiday home rentals, while users can also trade cryptocurrencies, stock and gold.

A UK banking licence would allow it to hold customer deposits and lend money – which is becoming more lucrative as interest rates rise.

Licence applications need to be approved by two regulators – the Financial Conduct Authority and the Bank of England’s Prudential Regulation Authority. Revolut was a darling of the UK’s tech scene for years and has been 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 it has suffered a series of blows this year as a slew of senior members of staff have left.

Finance boss Mikko Salovaara stepped down last week for ‘personal reasons’, while its UK banking chief James Radford resigned in March and 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 issued an alert that a chunk of its revenues may have been ‘materially mis-stated’.

At the time, Salovaara insisted that Revolut was on course to get a UK banking licence ‘any day now’.

A Revolut insider blamed staff retention issues on the regulatory hold-up. It was claimed that the business ‘can’t really get going’ until it receives full approval, which has caused internal frustration.

The firm also suffered a setback in April when investor Schroders valued it at £14 billion, which was a far cry from the £27 billion price tag it boasted in its last funding round in 2021.

Analysts said rather than reject Revolut’s application outright, the Bank of England may ask it to withdraw its application instead.

Revolut declined to comment.