Ministers will not intervene to rescue Revolut’s faltering application for a UK banking licence, the Mail has been told.
The payments app has been hailed by Chancellor Jeremy Hunt as a ‘shining example’ of Britain’s ‘world-beating fintech sector’.
But more than three months after declaring an announcement on its banking licence was imminent, it looks no closer to being achieved.
And a well-placed government source told the Mail: ‘Not everybody who applies for the licence gets one. Ministers have no role.’
Revolut’s application for a banking licence is being scrutinised by the Prudential Regulation Authority (PRA) – an arm of the Bank of England – and the Financial Conduct Authority (FCA).
At the same time, Hunt has made no secret of his admiration for the firm and its founder Nik Storonsky, who was pictured alongside him at an event earlier this year.
The Chancellor said last month that while regulators must remain independent it was important for them to ‘understand their wider responsibilities for economic growth’.
That will be enshrined in law when the Financial Services and Markets Bill takes effect, expected within weeks.
It will impose a duty on regulators to have regard to the UK’s growth and international competitiveness, and report regularly on how well they are achieving that.
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But the Mail has been told that Revolut is not being seen in the Government as a test case for that obligation. If regulators decide they do not want to grant the firm a licence, they are likely to advise it to withdraw its application.
But Revolut could decide to press ahead and, if refused, appeal the decision. The firm was bullish back in March when it said it believed a UK banking licence would be granted ‘imminently’.
Those comments came as it published delayed annual results for 2021, showing a first-ever profit of £26million and revenues tripling to £636million. But things began to unravel quickly.
Auditor BDO said £477million of revenues – three-quarters of the total – could not be verified and may have been misstated.
The fallout from that revelation then appeared to have caused a split, with Revolut hitting out at ‘misreporting’ of the auditor’s opinion, only for the Financial Times to report that some independent board members viewed that as an ‘overreaction’.
Then in April, funds giant Schroders cut the valuation of its stake in Revolut from £10.1million to £5.4million, implying the company was worth about £14billion, just over half its previous valuation of around £26billion.
Meanwhile, the Telegraph reported that the PRA had told the Treasury in March that it planned to reject Revolut’s application – but that the notice was not served and there were subsequently urgent behind-the-scenes talks to try to rescue it.
The drawn-out application was all becoming too much for 38-year-old Storonsky, who told the Times last month that it was a ‘long and tiring process’ while railing against tax and red tape and saying his company would never consider floating in London.
And in a pot shot at regulators, he said: ‘You wait for emails or letters for months. This is not the business environment to operate in the modern world.’
In another blow, Revolut’s finance chief Mikko Salovaara quit ‘for personal reasons’.
Martin Gilbert, the City grandee who is Revolut’s chairman, was due to meet the PRA last week to try to resolve the impasse over its application.
A Revolut spokesman said: ‘We do not comment on ongoing licence applications.’
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