British FinTech Revolut could be a step closer to getting its U.K. banking license.
The company this week is expected to sign off on its 2021 financial accounts as part of an audit, a Revolut spokesperson told PYMNTS Sunday (Feb. 19).
“Our accounts are finalized and we expect to confirm the previously reported news that we are profitable. We are very proud of this and intend to file the accounts soon.”
Also news was a report by the Financial Times (FT) Sunday, citing sources familiar with the matter. It says that auditor BDO is expected to approve the filing, which confirms that Revolut is profitable.
The filing could help clear the way for the company to obtain a digital banking license from regulators the Financial Conduct Authority and Prudential Regulation Authority, the report said.
PYMNTS noted last year that Revolut was facing pressure to improve its internal financial reporting controls, after the U.K.’s Financial Reporting Council found the company’s audits were flawed and had a high risk of “misstatement.”
An earlier report by the FT said Revolut’s payments group lost a number of key personnel in its risk and compliance departments.
“The auditors are being significantly more challenging now, because they’re getting beaten up by their regulators,” a source told the FT.
Another source said Revolut had to make upgrades to “unsexy things like its back office and controls” because it needs a culture that’s closer to that of a bank than a tech firm.
As PYMNTS wrote last month in a story about neobanks working to reach profitability, the long wait for the report has left a question mark over the company’s finances as regulators pressure it to improve its audits and internal controls for financial reporting.
“In the end, neobanks that have yet to turn a profit will likely argue that business is a marathon, not a sprint,” PYMNTS wrote. “But with some of the biggest players in the space now reporting positive margins, those that don’t will be under more pressure to explain why.”
Last month Revolut continued its European expansion by offering Irish customers local bank accounts. By giving them Irish International Bank Account Numbers (IBANs), the company’s 2 million-plus Irish customers can stop using IBANs from Lithuania.
Revolut said some customers in Ireland had run into employers or service providers who refused to accept an IBAN from another country, an example of what PYMNTS has called “IBAN discrimination.”
“Our customers can get their salaries paid directly into Revolut hassle-free, easily make direct debits, and more with the help of an Irish IBAN,” Revolut Europe CEO Joe Heneghan said.
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