The Bank of England is reportedly planning to reject Revolut’s longstanding application for a banking license in the UK, as reported by the Telegraph.
Revolut has been pursuing a UK banking license for two years, with hopes from its executives that approval would come soon. However, the Telegraph indicates that the Bank of England’s Prudential Regulation Authority (PRA) informed the Treasury in March of its intention to issue a statutory warning to Revolut due to concerns regarding the company’s balance sheet.
After a six-month delay, Revolut submitted its accounts in March, but auditor BDO raised issues, stating it could not verify £477 million of the reported revenue due to concerns about the completeness and occurrence of that revenue linked to the company’s internal IT systems. Although the warning has yet to be issued, Revolut is engaged in urgent discussions to secure the license.
Revolut CEO, Nikolay Storonsky, noted earlier this month that the delay in licensing is related to regulators’ concerns stemming from recent banking crises involving institutions like Silicon Valley Bank and Credit Suisse.
If Revolut’s banking license application is denied, the company can continue to operate in the UK but will be unable to offer mortgages and loans, which are critical to its long-term strategy.
Additionally, Revolut has faced challenges recently as its CFO, Mikko Salovaara, announced his resignation for personal reasons earlier this month. Salovaara joined the company in January 2021, coinciding with its banking license application submission.