Nikolay Storonsky, CEO and co-founder of British fintech giant Revolut, expressed optimism regarding the company’s pursuit of a UK banking license. In an exclusive interview with CNBC, Storonsky revealed that after a lengthy, three-year journey, the company feels confident about securing the license. “Hopefully, sooner or later, we’ll get it,” Storonsky said, noting that while regulators are still working on it, no outstanding concerns have been raised.
Storonsky explained that Revolut’s considerable size has contributed to the extended approval process, contrasting this with the quicker approvals typically granted to smaller institutions. “They usually approve someone twice every year,” he said, pointing out that smaller companies often find it easier to get licenses. Revolut, already a licensed electronic money institution in the UK, needs a bank license to offer lending products like credit cards and personal loans.
Revolut’s share structure was a significant hurdle, which did not align with the Prudential Regulation Authority’s rulebook. This issue was resolved when Japanese tech investor SoftBank agreed to transfer its shares to a unified class, relinquishing preferential rights. This move was essential for compliance with the Bank of England’s conditions for granting the license.
2023: A Breakout Year
Revolut reported a remarkable financial turnaround in 2023, achieving a pre-tax profit of £438 million ($545 million) from a pre-tax loss of £25.4 million in 2022. Group revenues nearly doubled to £1.8 billion ($2.2 billion), driven by a significant increase in user numbers and strong performance across key business lines.
Victor Stinga, Revolut’s CFO, highlighted that the company added 12 million customers in 2023, contributing to the robust growth. He attributed the revenue surge to three main factors: customer growth, strong performance in card fees, foreign exchange, and subscriptions, and a substantial rise in interest income, which now makes up about 28% of Revolut’s revenues.
Stinga emphasized the importance of financial discipline in 2023, adopting a “zero-based budgeting” approach that kept operating expenses under control. This strategy led to administrative expenses growing by 49%, compared to nearly doubled revenues. Additionally, Revolut invested $300 million in advertising and marketing last year and continues to prioritize business banking solutions, dedicating about 900 employees to business-to-business sales.
As Revolut continues its expansion, Storonsky remains hopeful that securing the UK banking license will soon become a reality, further solidifying the fintech’s position in the financial industry.
