Revolut secures UK banking licence after three-year wait
25 July 2024, 14:34
A licence means the company will be able to hold customer deposits, and offer lending products like credit cards, personal loans, or mortgages.
Revolut has secured a UK banking licence, marking the end of the fintech giant’s three-year wait for approval to operate as a bank in its home market.
A licence means the company will be able to hold customer deposits, and offer lending products like credit cards, personal loans, or mortgages.
The licence comes with restrictions, however, meaning it could be another year before it is able to launch new products in the market.
London-based Revolut has more than nine million UK customers and 45 million around the world, but it was still classified as an electronic money institution in the UK.
It first filed an application for a licence in the UK to the Prudential Regulation Authority in 2021.
The same year, it became the country’s most valuable start-up worth a record 33 billion US dollars (£26 billion).
But the road to becoming a bank has been challenging, with the company repeatedly saying that approval was just around the corner.
In March 2023 it said it would be given the green light “any day now”.
Revolut said on Thursday it had received the UK licence “with restrictions”, meaning it has a year to build and test the systems it will use as an authorised bank.
Chief executive Nik Storonsky said: “We are incredibly proud to reach this important milestone in the journey of the company and we will ensure we deliver on making Revolut the bank of choice for the UK.”
UK boss Francesca Carlesi said the firm “can’t wait to get going”.
She added: “It is a tremendous responsibility to be a bank in the UK and we will work relentlessly to offer products and services that improve the financial lives of everyone who uses Revolut.”
Revolut already has a European banking licence, thanks to approval from authorities in Lithuania, allowing it to offer personal loans in France, Germany and Spain.
The company said it has entered a “mobilisation” stage in the UK, a restricted period where new banks must finish building their banking operations ahead of launching in the market.
This can include securing further investment, recruiting staff, and investing in IT systems.
During this time, it can hold only £50,000 of total customer deposits.
It means nothing changes for existing customers who can continue to use their accounts as normal.
Under the PRA’s rules, the testing stage must be a maximum of 12 months, but it is understood that Revolut is aiming to complete it sooner.
Revolut made a record pre-tax profit in 2023, of £438 million up from a loss of £25 million in 2022.
The group, which has its global headquarters in London’s Canary Wharf, has expanded aggressively in recent years, opening offices in new countries including Brazil and New Zealand in 2023.
