Revolut’s long delayed accounts show loss of €29m

Online bank Revolut published its delayed accounts for 2022 on Friday, removing a hurdle in its bid for a UK banking license as the fintech seeks to boost its operations.

The London-based startup said revenue for the year jumped 45pc to £922.5m (€1bn), while pretax loss was £25.4m (€29), down from a restated profit of £39.8m the previous year. It said revenue for 2023 is on track to hit $2 billion, with double-digit net profit margin.

The 2022 accounts were released days before the end-of-December deadline, which had already been extended from September, marking a second consecutive year Revolut has needed more time.

Auditors at BDO signed off on the statements and said an issue that left it unable to satisfy itself about the completeness of some of Revolut's revenue data for 2021 was resolved.

Getting its accounts in order is one of the crucial steps that could pave the way for a UK license, for which Revolut applied in January 2021, and eventually one for the US as well.

"We remain committed to our ongoing UK banking licence application," Chief Executive Officer Nik Storonsky said in the annual report

A license would allow Revolut to offer more loans and even mortgages, allowing it to benefit from the higher interest rates that have boosted margins at large banks over the past few years. In Europe, the challenger will be directly supervised by the European Central Bank as of 1 January 2024.

The accounts for 2021 showed that while the fintech made its first annual profit that year, its auditor was unable to satisfy itself on the "completeness and occurrence" of almost three-quarters of its revenue. In a May interview, Storonsky said that issue had been fixed.

"We've been through a sort of a learning curve" with control-based audits, which are different from previous auditing styles, Chairman Martin Gilbert said in a telephone interview.

Revolut, founded by Storonsky and chief technology officer Vlad Yatsenko, is one of the UK's most valuable startups.

In a 2021 funding round, it was valued at $33bn. It hired Francesca Carlesi, a former Barclays and Deutsche Bank executive, as head of its UK division in November, who will also help lead efforts to secure the license.

"We strengthened our financial position, grew our customer base, launched multiple new products, expanded into new markets, and bolstered our risk, compliance and governance infrastructure," Storonsky said in a separate statement alongside the results.

More recently, the company told investors it was on track to generate £1.5 billion in revenue this year, suggesting its international growth continues to gather pace. About 300,000 customers a week are signing up for Revolut's services, Bloomberg News has reported.

Reporting On:independent.ie