Revolut posts first annual profit as it targets UK banking licence

• London-based fintech Revolut posted its first annual profit for the year ending 2021.
• The neo-bank almost tripled its revenue in 2021 amid a boom in cryptocurrency trading.
• Despite repeatedly missing reporting deadlines, Revolut may soon acquire a UK banking licence.

Revolut, the London-based fintech firm, has published its first annual profit after missing several deadlines to publish its financials.

The $33 billion fintech, founded in 2015, gained popularity by enabling users to spend money worldwide in 150 currencies at a real-time rate without fees through a debit card. It also offers bank accounts, savings options, plus trading in stocks and cryptocurrencies. It remains privately held and includes investors such as SoftBank and Tiger Global.

Revolut delivered a net profit of 26.3 million pounds ($31.8 million) for the whole of 2021, according to its latest annual report. Neobank’s revenue almost tripled during this period, growing from £220 million ($265.6 million) in 2020 to £636 million ($767.7 million) in 2021.

Revolut also claimed to have achieved $1 billion in revenue for all of 2022.

The fintech claimed to have around 16 million customers globally by 2021 and said its weekly active user count grew by 50% through 2021.

The bank’s foreign exchange and wealth offering, which includes cryptocurrency trading, grew more than eightfold in 2021 to £349m ($421.2m).

Revolut CEO and co-founder Nik Storonsky has repeatedly argued that fintech was profitable in interviews with Insider and other outlets, but the hard numbers come only after his firm missed several deadlines to release its financials.

The neo-bank was required to submit its 2021 results last September but was granted an extension until December 2022, which it also missed. The delays came after Revolut’s auditor since 2018, BDO, pushed for stronger internal controls at the company after the Financial Reporting Council, the auditing regulator, found there was an “unacceptably high” risk of “material misstatement” in its 2020 Financial Reporting accounts. The Times reported.

Revolut operates globally, but the UK market, where it does not have a banking licence, makes up the bulk of its revenue.

In its latest report, the company said it was “in the advanced stages of its application” to UK regulators, but did not give a deadline, although media reports indicate it may be on the verge of securing a licence. The business has had a full banking license in Europe since 2021, having started life as an e-money institution in Lithuania in 2020.

“We have achieved our first full year of profit and demonstrated that we can accelerate customer growth at scale and increase revenue across all of our product lines,” Storonsky said.

Revolut’s annual profit makes it the second UK challenger bank to achieve profitability after London-based Starling Bank.

Profitability has become a top priority for consumer-facing fintech companies amid a slowdown in VC funding and a depressed macroeconomic environment.