Revolut boss confident of UK banking licence approval after record profits

Nikolai Storonsky, founder and CEO of Revolut.

Harry Murphy | Sportsfile for Web Summit via Getty Images

The boss of London-based financial technology giant Revolut told CNBC he was optimistic the company would get a UK banking license after it reported record annual pre-tax profits amid a surge in users.

In an exclusive interview with CNBC, Revolut CEO and co-founder Nikolai Storonsky said the company is confident it will be able to secure a UK banking licence after overcoming several major hurdles in a process that took more than three years to get regulatory approval.

“Hopefully, sooner or later, we’ll get to it,” Storonsky told CNBC via video call. He added that regulators are “still working on it,” but so far they haven’t raised any outstanding concerns about fintech.

Storonsky noted that Revolut’s sheer size meant it took longer for the company to get a banking license than it would have taken for a smaller company. He added that some smaller financial institutions have been able to get banking licenses even when they have few customers.

“UK banking licenses are being granted to smaller companies,” Storonski said. “They usually approve someone twice a year.” And they tend to be smaller institutions. “Of course, because we are so large, it takes longer.”

Revolut is a UK-licensed electronic money institution or EMI. However, it is not yet able to offer lending products such as credit cards, personal loans or mortgages. A banking license would allow it to offer loans in the UK. The company’s application, which was submitted in 2021, has been delayed for a long time.

One of the main issues the company faced was that its share structure did not align with the rules of the Prudential Regulation Authority, the financial services industry regulator under the Bank of England.

Revolut has a number of classes of shares, some of which have previously been granted priority. One of the conditions set by the Bank of England in granting Revolut a UK banking licence was that the six classes of shares be reduced to ordinary shares.

Revolut has since settled the matter, with the company reaching an agreement with Japanese tech investor SoftBank to transfer its shares into a consolidated class and waive its preferred rights, a person familiar with the matter said. News of the settlement with SoftBank was first reported by the Financial Times.

2023 is the 'Year of Breakthrough'

The fintech giant's financial results, released on Tuesday, forecast annual pre-tax profit of $438 million ($545 million) in 2023, up from a pre-tax loss of $25.4 million in 2022. Group revenue rose 95% to $1.8 billion ($2.2 billion) in 2022, up from $920 million ($1.1 billion).

Revolut’s Chief Financial Officer, Victor Stinga, said the company’s growth was driven by a record surge in user numbers. Revolut added 12 million customers in 2023 and delivered strong performance across all its key business segments, including card fees, foreign exchange and wealth, and subscriptions.

“We see 2023 as a breakthrough year for growth and profitability,” Stinga said in an interview this week.

According to Stinga, revenue growth was driven by three key factors, including customer growth, strong performance in key revenue segments, and a significant increase in interest income, which now accounts for approximately 28% of Revolut’s revenue.

He added that Revolut has made exercising financial discipline a key priority in 2023, curbing operating costs and adopting a “zero-based budgeting” philosophy where all new expenses must be justified and accounted for before being deemed allowable.

According to Stinger, this means that administrative costs have grown much less than revenues, which grew 49% while revenues nearly doubled year-over-year.

Revolut has been investing more aggressively in advertising and marketing, he added, with the company investing $300 million in advertising and marketing last year. The company’s business banking solutions are also a priority, with Revolut dedicating around 900 staff to business-to-business sales.

Sources 1/ https://Google.com/ 2/ https://www.cnbc.com/2024/07/02/revolut-boss-confident-on-uk-bank-license-approval-after-record-profit.html The mention sources can contact us to remove/changing this article

What Are The Main Benefits Of Comparing Car Insurance Quotes Online

LOS ANGELES, CA / ACCESSWIRE / June 24, 2020, / Compare-autoinsurance.Org has launched a new blog post that presents the main benefits of comparing multiple car insurance quotes. For more info and free online quotes, please visit https://compare-autoinsurance.Org/the-advantages-of-comparing-prices-with-car-insurance-quotes-online/ The modern society has numerous technological advantages. One important advantage is the speed at which information is sent and received. With the help of the internet, the shopping habits of many persons have drastically changed. The car insurance industry hasn't remained untouched by these changes. On the internet, drivers can compare insurance prices and find out which sellers have the best offers. View photos The advantages of comparing online car insurance quotes are the following: Online quotes can be obtained from anywhere and at any time. Unlike physical insurance agencies, websites don't have a specific schedule and they are available at any time. Drivers that have busy working schedules, can compare quotes from anywhere and at any time, even at midnight. Multiple choices. Almost all insurance providers, no matter if they are well-known brands or just local insurers, have an online presence. Online quotes will allow policyholders the chance to discover multiple insurance companies and check their prices. Drivers are no longer required to get quotes from just a few known insurance companies. Also, local and regional insurers can provide lower insurance rates for the same services. Accurate insurance estimates. Online quotes can only be accurate if the customers provide accurate and real info about their car models and driving history. Lying about past driving incidents can make the price estimates to be lower, but when dealing with an insurance company lying to them is useless. Usually, insurance companies will do research about a potential customer before granting him coverage. Online quotes can be sorted easily. Although drivers are recommended to not choose a policy just based on its price, drivers can easily sort quotes by insurance price. Using brokerage websites will allow drivers to get quotes from multiple insurers, thus making the comparison faster and easier. For additional info, money-saving tips, and free car insurance quotes, visit https://compare-autoinsurance.Org/ Compare-autoinsurance.Org is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc. "Online quotes can easily help drivers obtain better car insurance deals. All they have to do is to complete an online form with accurate and real info, then compare prices", said Russell Rabichev, Marketing Director of Internet Marketing Company. CONTACT: Company Name: Internet Marketing CompanyPerson for contact Name: Gurgu CPhone Number: (818) 359-3898Email: [email protected]: https://compare-autoinsurance.Org/ SOURCE: Compare-autoinsurance.Org View source version on accesswire.Com:https://www.Accesswire.Com/595055/What-Are-The-Main-Benefits-Of-Comparing-Car-Insurance-Quotes-Online View photos