Revolut CEO confident on UK bank license approval as fintech firm hits record $545 million profit

LONDON — The brag of British fiscal exertion elephantine Revolut told CNBC helium is optimistic astir the company's chances of being granted a U.K. banking license, arsenic a leap successful users saw the steadfast study grounds full-year pre-tax profits.

In an exclusive interrogation with CNBC, Nikolay Storonsky, Revolut's CEO and co-founder, said that the institution is feeling assured astir securing its British slope license, aft overcoming immoderate cardinal hurdles successful its much than three-year-long travel toward gaining support from regulators.

"Hopefully, sooner oregon later, we'll get it," Storonsky told CNBC via video call. Regulators are "still moving connected it," helium added, but truthful acold haven't raised immoderate outstanding concerns with the fintech.

Storonsky noted that Revolut's immense size has meant that it's taken longer for the institution to get its banking licence approved than would person been the lawsuit for smaller companies. Several tiny fiscal institutions person been capable to triumph support for a banking licence with fewer customers, helium added.

"U.K. banking licenses are being approved for smaller companies," Storonsky said. "They usually o.k. idiosyncratic doubly each year," and they typically thin to beryllium smaller institutions. "Of course, we are precise large, truthful it takes other time."

Revolut is simply a licensed physics wealth institution, oregon EMI, successful the U.K. But it can't yet connection lending products specified arsenic recognition cards, idiosyncratic loans, oregon mortgages. A slope licence would alteration it to connection loans successful the U.K. The steadfast has faced lengthy delays to its application, which it filed successful 2021.

One cardinal contented the institution faced was with its stock operation being inconsistent with the rulebook of the Prudential Regulation Authority, which is the regulatory assemblage for the fiscal services manufacture that sits nether the Bank of England.

Revolut has aggregate classes of shares and immoderate of those stock classes antecedently had preferential rights attached. One conditions acceptable by the Bank of England for granting Revolut its U.K. banking license, was to illness its six classes of shares into mean shares.

Revolut has since resolved this, with the institution striking a woody with Japanese tech capitalist SoftBank to transportation its shares successful the steadfast to a unified class, relinquishing preferential rights, according to a idiosyncratic acquainted with the matter. News of the solution with SoftBank was archetypal reported by the Financial Times.

The fintech elephantine connected Tuesday released fiscal results showing full-year pre-tax nett roseate to £438 cardinal ($545 million) successful 2023, swinging to the achromatic from a pre-tax nonaccomplishment of £25.4 cardinal successful 2022. Group revenues roseate by 95% to £1.8 cardinal ($2.2 billion), up from £920 cardinal ($1.1 billion) successful 2022.

Victor Stinga, Revolut's main fiscal officer, said the company's maturation stemmed from a grounds leap successful idiosyncratic numbers — Revolut added 12 cardinal customers successful 2023 — arsenic good arsenic beardown show crossed each its cardinal concern lines, including paper fees, overseas speech and wealth, and subscriptions.

"We see 2023 to beryllium what we would telephone a breakout twelvemonth from the constituent of presumption of maturation and profitability," Stinga said successful an interrogation this week.

Revenue maturation was driven by 3 main factors, Stinga said, including lawsuit growth, beardown show crossed its cardinal gross lines, and a important leap successful involvement income, which helium said present accounts for astir 28% of Revolut's revenues.

He added that Revolut made exercising fiscal subject a cardinal precedence successful 2023, keeping a lid connected operating expenses and adopting a "zero-based budgeting" philosophy, wherever each caller disbursal has to beryllium justified and accounted for earlier it's considered acceptable.

This translated to administrative expenses increasing acold little than revenues did, Stinga said, with admin costs increasing by 49% portion revenues astir doubled year-on-year.

Revolut has been investing much aggressively in advertising and marketing, helium added, with the steadfast having deployed $300 cardinal successful advertizing and marketing last year. The company's concern banking solutions are besides a apical priority, with Revolut devoting astir 900 employees toward business-to-business sales.