Revolut has reported record annual profits and further hinted at plans for a stock market flotation, despite still struggling to secure a UK banking licence.
The London-based fintech company, which has been waiting more than three years for its UK licence to be approved, swung to a £438m profit in 2023, having made a £25m loss a year earlier.
Profits were increased by higher interest rates and an ambitious expansion plan that helped to add 12 million customers to its user base last year. Revenues jumped 95% to £1.8bn in 2023, according to its latest annual report.
But bosses have yet to persuade regulators to grant the company a UK banking licence that would open the door to new income streams. A licence would allow Revolut to hold its customers’ deposits, which would help fund its own-branded loans and mortgages. It would also probably persuade regulators in other key countries such as the US to follow suit.
The challenge, in part, has been convincing regulators that Revolut has addressed a number of accounting and reputational concerns in recent years, after EU regulatory breaches, questions over its corporate culture and the late filing of its accounts.
Revolut bosses made little reference in its latest annual report to the UK application,which was lodged in early 2021, saying only: “We are continuing to work closely with the [Prudential Regulation Authority] on our UK bank licence application.”
However, Revolut – which was valued at $33bn in 2021 – gave further hints that it was on track for a bumper initial public offering (IPO). It said in its annual report that it had “enhanced” its financial controls in ways expected of “listed companies”.
It comes a year after the auditor BDO said it had been unable to get a full picture of Revolut’s revenue, and warned that as a result the company’s finances were at risk of being “materially misstated”.
Revolut said it had focused on improving its processes throughout 2023 in a way that allowed BDO to “increase their understanding of the business” and release its financial results earlier, having previously faced significant delays.
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“We are pleased that Revolut’s transformation programme has now enabled us to return to a regular financial reporting schedule,” Revolut said. “We are confident we have set solid foundations that, in the long run, will support our expanding banking operations and will bring our financial processes in line with the standards expected from publicly listed companies.”
Revolut more than tripled the salary of its highest-paid director, believed to be the founder and chief executive Nik Storonsky, to £333,000 from £100,00 a year earlier. However, his overall pay plunged 97% due a big share payout in 2022 that took his total pay to £17.8m that year. That figure fell to £378,000 in 2023.