Revolut is expected to sign off overdue accounts next week

Revolut expects to sign its financial accounts next week after months of delays in finalizing the figures as auditors put pressure on the fintech group to improve its internal controls.

The UK-based company’s audit committee will meet on Thursday to approve its 2021 financial statements, which are then expected to be signed by auditor BDO on Friday, people familiar with the matter told the Financial Times.

The Nikolay Storonksy-led company has suffered significant growing pains in its bid to take on traditional banks. Insiders have uncovered an ambitious culture and the company, last valued at $33 billion in July 2021, has been hit by high-profile departures from senior compliance staff.

Regulators have scrutinized its culture and called for a separate review of the financial crime prevention and detection measures in place at the fintech, which has been seeking a UK banking license since early 2021.

Filing the accounts could remove another obstacle to the company’s efforts to obtain the license. The UK regulators responsible for issuing the license – the Financial Conduct Authority and the Prudential Regulation Authority – declined to comment.

The annual accounts for the year ended December 2021 had to be filed with Companies House in September 2022. The fintech then received an extension of the deadline until the end of December – a deadline that it also failed to meet.

In a Jan. 6 statement, Revolut said its accounts were “closed.”

On Friday it reiterated that the accounts were “closed” and that the deal was expected to be profitable. “We are very proud of this and intend to file the accounts soon,” it said. BDO declined to comment.

While the final release could be delayed by late concerns, people with knowledge of the matter said they didn’t expect any additional delays.

BDO has urged Revolut to improve its internal controls after Britain’s accounting authority, the Financial Reporting Council, found there was an “unacceptably high” risk of “material misstatement” in its 2020 accounts.

FRC findings, announced by the FT in September, included BDO’s audit taking an “inadequate” approach to revenue recognition. The FRC’s criticism of BDO has caused the auditor to take a tougher approach to this year’s financial statements, people familiar with the matter said.

A person close to Revolut said regulators could grant the fintech a “limited license” within months and as early as March of presenting the accounts – a precursor to obtaining a full banking license.

Storonsky told the FT in November 2021 that he hopes to obtain a UK banking license in early 2022. Last November, he said, “We’re nearing the end of the process, or as close as we’ve ever been.”

Revolut has evolved from a low-fee money transfer service to offering bank accounts across Europe through its Lithuanian banking license. Its previous funding round made it the second most valuable private fintech in Europe and meant it didn’t have to return to the market when technology valuations collapsed.

Analysts say a UK banking license would help boost profitability, particularly as higher interest rates make deposits more valuable, and also help persuade regulators in other markets to offer it licenses.

Revolut could be fined by Companies House for not filing its accounts on time. The penalty for a delay of up to three months is up to £375 per company. Company directors can also be prosecuted if the registry decides to prosecute them.

Your European bank was fined €70,000 in November for late filing its annual accounts. Revolut is expected to sign off overdue accounts next week

Adam Bradshaw

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