Revolut secures UK banking licence after three-year wait

It is understood that the victory will have a positive knock-on effect across Revolut's other markets

Undated file handout photo issued by Revolut of a Revolut card on a table. Revolut has secured a UK banking licence, three years after making an application to regulators, the fintech firm has announced. A licence means the company will be able to operate as a bank and offer lending products like credit cards, personal loans, or mortgages. Issue date: Thursday July 25, 2024.

Global fintech firm Revolut has received a UK banking licence following a three-year wait, allowing it to compete more directly against Britain's biggest banks.

It is a major victory for Revolut and marks a new era for the company, with the licence bringing it closer to the same UK permissions as the traditional banks it is seeking to challenge.

Revolut said in a statement it had now entered a "mobilisation" stage of its UK efforts, which will allow the firm to complete building its UK banking operations ahead of launching in the market.

It is understood that the move will have a positive knock-on effect across Revolut's other markets, including Ireland.

The status allows new banks to secure investment, recruit staff and bolster IT systems, while limiting the amount of total deposits the new bank can accept.

During the 12 month mobilisation stage, new banks must demonstrate they will be fully operational and address additional issues identified by the regulator before they can trade fully.

The banking licence is a step forward in Revolut's journey towards eventually listing on the stock market, which the company has said it wants to pursue.

Founded in 2015 by its current CEO Nik Storonsky and its CTO Vlad Yatsenko, Revolut is one of a handful of fintech companies that has grown from its London headquarters over the past decade, offering financial and banking services without having physical branches.

But the company has drawn regulatory scrutiny over its internal accounting and twice delayed publication of its full-year accounts in recent years. However, its interim chief financial officer said this month the company had since improved internal controls.

Revolut posted a record pre-tax profit of €503m for 2023 on strong user growth and soaring interest-related income, in accounts filed this month ahead of a September deadline. Revolut could be valued at north of $40bn through a planned share sale, Reuters reported last month.

Storonsky, Revolut's CEO, said in the statement that the announcement was an important milestone in the company's journey that would "ensure we deliver on making Revolut the bank of choice for UK customers".