UK fintech Revolut has been dealt a major blow in its plans to establish itself as a traditional bank having withdrawn its licence application on the belief the Bank of England would reject the proposal. 

This news will surely put a spanner in the works for Revolut as the neobank has been seeking a UK banking licence since 2021 and according to The Telegraph, Revolut are now holding “urgent talks behind the scenes in a bid to rescue the licence application”. 

A UK banking licence is crucial for Revolut to be able to remain and outperform its competitors. The licence would grant the fintech with traditional bank capabilities such as regulated-protected deposits and mortgages, and become a challenger bank to the UK’s big four (Natwest Group, Lloyds Banking Group, HSBC and Barclays). 

The Prudential Regulation Authority (PRA), tasked with the responsibility of overseeing licence applications, informed HM Treasury that they had concerns over Revolut’s balance sheets and that such application would be turned down ‘within weeks’, according to The Telegraph report. 

Often viewed as the shining light of the UK’s burgeoning financial and fintech sectors, amassing a valuation that has topped £33bn since 2021, Revolut has been involved in numerous controversies over the past several months. 

The startup’s auditor found in March that it was unable to verify up to three-quarters-worth of revenue, approximately £636m, and the auditor BDO LLP described Revolut’s books as “materially misstated”. 

This owed to the company’s internal accounting systems delaying the overview of its 2021 financial statements for several months, with the company unable to “provide sufficient appropriate assurances” according to BDO. 

Revolut has also been plagued with poor working environment accusations which resulted in the company forming a working culture team to address issues such as unattainable targets and disrespectful comments placed upon employees. 

Reports suggest that Revolut’s poor working environment may have escalated to the point where a former UK executive, James Radford, was alleged to have sent a message to a customer that he would be waiting for him ‘in my garden with my shotgun’. 

Whilst Revolut confirmed they would be launching an investigation into the matter, he became one of several of the firm’s UK executives to leave the company this year.

So whilst many internal struggles may have hindered the company’s plans for a UK banking licence, The Telegraph suggests that Revolut is still resilient in its efforts to obtain the licence. 

Elsewhere, Revolut was granted a banking licence from the European Union in 2021, with plans to apply for a licence in the US and Australia, with the latter becoming more viable after the company announced recently it had set up a business account in the land down under.