Bank of England reportedly planning to reject Revolut banking licence
The Bank of England is reportedly planning to reject fintech firm Revolut’s application for a banking licence.
Bank of England plans to reject Revolut’s banking licence
The UK’s Prudential Regulation Authority (PRA) told the government in March, according to The Telegraph, that it intended to issue a warning notice to Revolut over concerns around the fintech’s balance sheet.
Revolut has reportedly claimed auditors’ concerns were about revenues, not the balance sheet.
According to The Telegraph, the warning has not been issued and talks are ongoing to ensure the licence application is successful.
Revolut’s existing services will not be affected if it is refused a licence but the company would be unable to offer mortgages and loans to UK customers.
Last month, Revolut shareholder Schroders slashed the valuation of its stake in the neobank by almost half – suggesting $15 billion (£12 billion) could be wiped off Revolut’s $33 billion valuation.
The devaluation by Schroders came just weeks after Revolut released its long-awaited annual report for the year ending 31 December 2021, for which its auditor BDO reportedly flagged concerns about not being able to verify three-quarters of its revenue.
However, a Revolut spokesperson told Reuters at the time the bank’s stated revenue “was not in question” and that the auditor’s concerns were “remedied in 2021”.
The financial super-app recently launched in Brazil, marking the fintech firm’s first foray into Latin America.
In March, Revolut recorded £26.3 million in profit for 2021, marking the firm’s first full year of profitability.
