UK’s $33 billion banking app Revolut turns profitable while stuck in banking license impasse
After years of losses, British banking app Revolut finally turned a corner last year. Its revenue nearly doubled to £1.8 billion ($2.27 billion), helping it post a pre-tax profit of £438 million ($553 million).
The news will come as a relief to the fintech company’s top investors, including Index Ventures, Softbank Vision Fund 2 and Balderton Capital, who have collectively poured more than $2 billion into the company since 2015.
Revolut’s profit increase was driven by a 46% increase in customer numbers. Twelve million new customers were added, bringing the total to 38 million across the 38 countries in which Revolut now operates.
“Our customer base is expanding at an impressive pace and our diversified business model continues to drive outstanding financial performance,” said Nik Storonsky, CEO and co-founder of Revolut.
This increase in customer numbers drove a 59% increase in card and interchange fees (to £486m) and a 46% increase in foreign exchange and usage of Revolut’s wealth management platform, which includes crypto trading, to £395m.
However, it’s not all good news. Revolut has been working to secure a banking license in the UK since 2021, when it was first appliedand has repeatedly stated that it will become a full-fledged bank.”any day now“ .
Without a banking licence, Revolut cannot tap into UK customer deposits to offer complex lending products, nor can it boast the same customer deposit protections as formal banks.
Storonsky briefly explained the ongoing delay today, saying: “We remain committed to our ongoing application for a UK banking licence, alongside bringing the Revolut app to new markets and customers around the world.”
Revolut Chairman Martin Gilbert also added: “We continue to work closely with the PRA (Prudential Regulation Authority) on our application for a UK banking licence.”
However, with the UK on the eve of a dramatic general election that is set to change the political landscape and introduce a Labour government with a new political agenda that could take place by the end of the week, Revolut’s hope is that “going to happen“The licensing may be delayed again.
Based on Financial TimesInstead, the fintech company is conducting a $500 million secondary stock sale that will see existing shareholders, including employees, receive some of their profits at an expected valuation of more than $40 billion.
Revolut completed its most recent funding round in 2021 when Softbank Vision Fund 2 and Tiger Global led an $800 million Series E round at a $33 billion valuation.
