Revolut Ltd. is nearing completion of its long-overdue 2021 financial accounts, which might clear the way for the start-up to gain a UK banking licence, according to two people familiar with the subject.
According to the persons, Revolut plans to publish financial records for the fiscal year ended December 2021, which were due last summer, by the end of January after receiving final approval from auditing firm BDO LLP. According to the sources, BDO and Revolut intend to meet on January 26.
Revolut was founded in 2015 by Nikolay Storonsky, a former derivatives trader at Credit Suisse Group AG and Lehman Brothers, and software developer Vladyslav Yatsenko as a prepaid card with low foreign-exchange expenses.
In the last reported investment round in 2021, it was valued at around $33 billion, making it Britain's most valuable start-up at the time.
The audit firm's approval comes after months of waiting.
The Financial Reporting Council (FRC), a U.K. organisation responsible for audit regulation, declared Revolut's BDO audit "inadequate" and stated that "the danger of an undiscovered material misstatement was unacceptably high."
According to one of the sources, the watchdog's review of the 2020 audit delayed clearance of Revolut's 2021 accounts. According to the source, Revolut will retain BDO for the 2022 audit.
BDO, FRC, and the Bank of England's Prudential Regulatory Authority, which approves banking licences, declined to comment.
According to the individual, the Revolut filing will likely indicate an increase in revenue from client subscriptions and exchange rate fees in 2021. After losing 200 million pounds the prior year, it is unclear how lucrative the company will be this year.
Storonsky stated in November that the firm was profitable and did not require more funding.
The financial statements could help the entrepreneur persuade UK regulators that Revolut is ready for a banking licence after a two-year delay.
According to regulatory guidance, Revolut also requires the approval of the Financial Conduct Authority (FCA) to win it.
According to the same source, Revolut is likely to choose a "authorization with restriction," in which it will operate with limits on customer deposits before becoming fully operational as a bank after a trial period.
It will not be the first startup to go this path.
In 2016, Starling Bank and Monzo were also granted restricted banking licences. It took nearly eight months for Monzo to have the restrictions lifted. Britain is an important market for Revolut, which aspires to be a worldwide financial firm. The corporation is already entering the European Union utilising its Lithuanian licence as a passport.
By fLEXI tEAM