London — Financial technology firm Revolut has received a UK banking licence with some restrictions, it said on Thursday, ending a three-year wait for the authorisation that will enable it to compete more directly against Britain’s biggest banks.
It is a major victory for Revolut, one of a handful of financial services apps — commonly known as fintechs — to emerge in Britain over the last decade, offering services without physical branches.
The licence brings London-based Revolut, which operates globally and has more than nine million UK customers, closer to the same UK permissions as the traditional banks it is seeking to challenge.
Revolut said in a statement it had now entered a “mobilisation” stage of its UK efforts, which will allow the firm to complete building its UK banking operations ahead of launching in the market.
The status allows new banks to secure investment, recruit staff and bolster IT systems, while limiting the amount of total deposits the new bank can accept, according to the website of Britain's banking regulator, the Prudential Regulation Authority.
During the 12-month mobilisation stage, new banks must demonstrate they will be fully operational and address additional issues identified by the regulator before they can trade fully.
The banking licence is a step forward in Revolut’s journey towards eventually listing on the stock market, which executives have said they want to pursue.
Founded in 2015 by Nik Storonsky, Revolut has grown rapidly by offering customers payments services, loans in some markets and the ability to trade stocks and cryptocurrencies, to become Europe's most valuable start-up.
But the company has drawn regulatory scrutiny over its internal accounting and twice delayed publication of its full-year accounts in recent years. Its interim CFO said this month the company had since improved internal controls.
Revolut posted a record pretax profit of £438m (at the time equivalent to $554m) for 2023 on strong user growth and soaring interest-related income, in accounts filed in July ahead of a September deadline.
Revolut could be valued at north of $40bn through a planned share sale, Reuters reported in June.
Storonsky, Revolut’s CEO, said in the statement that the announcement was an important milestone in the company's journey that would “ensure we deliver on making Revolut the bank of choice for UK customers”.
Reuters
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