Revolut expects to log off on its monetary accounts subsequent week after months of delays in finalising the figures as auditors put stress on the fintech group to enhance its inner controls.
The UK-based firm’s audit committee will meet on Thursday to approve the 2021 monetary accounts, that are then anticipated to be signed off by auditor BDO on Friday, folks aware of the matter informed the Monetary Instances.
The corporate, led by Nik Storonsky, has suffered important rising pains in its quest to tackle conventional banks. Insiders have revealed a hard-charging culture and the corporate, final valued at $33bn in July 2021, has been hit by high-profile departures of senior compliance employees.
Regulators have examined its tradition and requested a separate assessment of the measures in place to forestall and detect monetary crime on the fintech which has been looking for a UK banking licence since early 2021.
The submitting of the accounts may clear one other of the obstacles to the corporate’s makes an attempt to realize the licence. The UK regulators in control of granting the licence — the Monetary Conduct Authority and Prudential Regulation Authority — declined to remark.
The accounts for the yr ending December 2021 had been required to be submitted to Firms Home in September 2022. The fintech was then given an extension till the tip of December — a deadline it has additionally failed to satisfy.
In an announcement on January 6, Revolut mentioned its accounts had been “finalised”.
On Friday, it repeated that the accounts had been “finalised” and that it anticipated to verify the enterprise was worthwhile. “We’re very happy with this and intend to file the accounts quickly,” it mentioned. BDO declined to remark.
Whereas last sign-off might be delayed by any late issues, the folks with data of the matter mentioned they weren’t anticipating further hold-ups.
BDO has been pushing Revolut to enhance its inner controls after the UK accounting regulator, the Monetary Reporting Council, discovered there was an “unacceptably excessive” danger of “materials misstatement” in its 2020 accounts.
The FRC findings, revealed by the FT in September, included that BDO’s audit had an “insufficient” method to income recognition. The FRC’s criticism of BDO had resulted within the auditor taking a more durable method to this yr’s accounts, mentioned folks with data of the matter.
One individual near Revolut mentioned the regulators may give the fintech “authorisation with restriction” — a precursor to receiving a full banking licence — inside months and as quickly as March following the submission of accounts.
Storonsky informed the FT in November 2021 that he hoped to safe a UK banking licence early in 2022. Final November, he mentioned “we’re very near the tip of the method, or as shut as we’ve ever been”.
Revolut has developed from a low-fee cash switch service to supply financial institution accounts throughout Europe via its Lithuanian banking licence. Its earlier funding spherical made it the second Most worthy non-public fintech in Europe and meant it didn’t have to return to the market as tech valuations crumbled.
Analysts say {that a} UK banking licence would assist enhance profitability significantly as larger charges make deposits extra helpful, and would additionally assist persuade regulators in different markets to supply it licences.
Revolut might be fined by Firms Home for failing to file its accounts on time. The penalty for submitting as much as three months late is as much as £375 per firm. Firm administrators may additionally face prosecution if the registry chooses to pursue them.
Its European financial institution was fined €70,000 in November for late submitting of its monetary statements.
The spelling of Nik Storonsky’s title has been corrected.
