Revolut Faces Setback as Bank of England Rejects Banking License Application
According to reports from the Telegraph, the Bank of England is expected to reject Revolut's longstanding request for a banking license in the United Kingdom.
Revolut, a prominent player in the payments industry, has been striving to obtain a banking license in the UK for the past two years. Earlier this year, the company’s CEO expressed optimism that the license would be granted in the near future.
Nikolay Storonsky, the CEO of Revolut, recently commented that the license was delayed due to regulators’ concerns arising from the ongoing banking crises involving Silicon Valley Bank and Credit Suisse.
Storonsky’s remarks followed a period of turmoil at Revolut lasting over two months. Earlier reports had indicated that the approval of the license was imminent, only to be thwarted when BDO, the company’s auditor, expressed reservations about certain financial statements for 2021, stating that they were “materially misstated.”
BDO specifically raised concerns regarding the accuracy and occurrence of £500 million in revenue. In February, the auditors highlighted inconsistencies in Revolut’s 2021 revenue figures, which were later disputed by the company and independently verified.
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In the event that Revolut’s banking license is not approved, the company will still be able to operate in the UK; however, its profits will likely decline as it will be unable to offer mortgages and loans in the country, which are among its long-term goals.
Revolut has encountered various challenges in recent times. Just this month, the company’s CFO, Mikko Salovaara, resigned for personal reasons. Salovaara joined Revolut in January 2021, around the same time the company submitted its application for a banking license.