Proactive Investors - Reports that Revolut is apparently going to have its application for a banking licence rejected are put into context if you also know that more than 50 banks have been licenced by regulators in recent years.
No reasons were mentioned in the new report, but it comes after more than a two-year wait for the US$33bn-valued fintech firm, which has seen its chief financial officer recently step down and its founders complaining that the Bank of England’s regulatory arm was "doing a lot to slow us down".
The Prudential (LON:PRU) Regulation Authority, which is the BoE's regulatory arm and licensing body for the sector, has however dished out licences for 30 other startup banks since 2013 but not London-based Revolut, whose founders Nikolay Storonsky and Vlad Yatsenko hail from Russia and Ukraine respectively.
It has also authorised 24 new banks as either a branch or a subsidiary of overseas banks, such as Citi and Handelsbanken, as well as a group of Chinese lenders including China Construction Bank, Shanghai Pudong Development Bank and China CITIC Bank.
The startups include well-known brands such as Atom Bank, Starling, Monzo and Zopa, as well as lesser-known names including Civilised Bank, Allica Bank, Revver (2019) and Kroo (2021).
Some licences have been issued by the PRA in the past 12 months, including LHV Bank earlier this month after waiting less than a year, and both Griffin Financial and Scottish SME-focused AlbaCo receiving baking licence with restrictions in 2023, while Ashman Bank got its licence with restrictions last June as did fellow mortgage lender Perenna last August, which were among at least four licences dished out in the second half of 2022.
Revolut, which while being based in London has a Lithuanian-issued EU banking license and Russian links that have aroused worries for some, said earlier this year that it was closing in on receiving a UK banking licence.
But amid the delay on this authorisation, the startup published long-delayed 2021 results in March but auditor BDO warned that some information “may be materially misstated” as it was unable to satisfy itself of the “completeness and occurrence” of revenues, which Revolut tried to play down, to much consternation from its own independent board members, the audit industry and perhaps also the PRA.