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May 19, 2023

Bank of England Set to Reject Revolut's UK Banking license Application

The bank did apply for a UK license in 2021

Popular neobank Revolut, is facing a setback as it has been revealed that the Bank of England will reportledy be rejecting its application for a banking license in the uk market. Revealed by The Telegraph, concerns have been raised among analysts and also investors. If granted, the license would allow the neobank to provide loans and mortgages.

Since its inception, Revolut has operated under the regulation of an electronic money (e-money) institution. However, obtaining a full banking license would provide the necessary regulatory protections and enhance customer trust. Unfortunately, the bank's application seems to have hit a roadblock at the Bank of England.

Revolut's journey to secure a banking license has been marred by challenges. The neobank, valued as one of Europe's most valuable private tech companies, has faced executive turnover and raised questions regarding the accuracy of its financial statements. This year alone, five key employees, including the Chief Financial Officer, have departed. Although Revolut managed to achieve profitability in the 2021 financial year, the publication of its accounts faced significant delays. In fact, auditing firm BDO highlighted concerns about potential material misstatements in 75% of Revolut's 2021 revenues, attributing them to internal accounting system issues.

While Revolut successfully obtained a license in the European Union last year and has applied for one in the United States, the current setback in the UK could hamper its expansion plans and competitive positioning. The Telegraph's report reveals that urgent discussions are taking place behind the scenes, with efforts being made to salvage the license application.

Responding to the report, a spokesperson for Revolut declined to comment on the matter, maintaining the company's stance of not providing official statements on ongoing discussions or negotiations.

Revolut's bid for a UK banking license is facing rejection from the Bank of England, a development that could impede its growth and ability to compete in the highly regulated banking landscape. Despite its notable achievements and strong market presence, Revolut must address concerns surrounding executive stability and financial transparency to regain investor confidence and navigate the challenging path toward securing a banking license.

Neil Hodgson Coyle
Neil Hodgson-Coyle
Editorial chief at TechNews180
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