The fintech giant Revolut is contemplating changing
its auditors at a pivotal moment in its endeavor to secure a banking license in
the UK. This is due to a recent disagreement with its audit report by BDO, The
Standard reported.
The audit raised concerns about the completeness and
occurrence of a significant portion of the company’s revenues. This has
triggered a response from Revolut’s executives, including legal action to alter
media coverage.
While the company maintains confidence in
its financial statements, there is uncertainty around the planned changes. In
March, BDO’s audit report raised issues regarding a sum of £477 million in the firm’s financial report, citing
potential misstatements and IT control problems.
Despite considering a shift from BDO, Revolut could
retain the auditors at least until the end of its 2023 financial year. However,
the plans could potentially impact Revolut’s quest for a British banking
license. Revolut has waited for a long time to secure the approval due to audit-related
challenges.
Meanwhile, Revolut recently unveiled plans to grant retail investors access to bond trading in Europe. This move aims to
democratize the corporate and government bond market by lowering the minimum investment amount to €100. With a valuation of approximately €122 trillion, this market has traditionally
been challenging to retail investors.
Revolut’s foray into the bond market is not limited to Europe. It will encompass the US market as well. The fintech firm’s retail
investors will gain access to US government bonds and corporate bonds
from major entities like Wells Fargo and Apple, Finance Magnates reported.
Pursuit of the UK Banking License
Currently, Revolut operates within the European
Union under a Lithuanian banking license. However, the UK remains an important market for the company in terms of revenue. Revolut applied for a banking
license in the country in 2021. However, the company has faced challenges involving the complexity of its ownership
structure. The Bank of England has highlighted multiple share classes as an issue in granting the license.
However, months-long negotiations between Revolut and SoftBank, termed “Project Swan”, led to an agreement to streamline this concern. SoftBank relinquished its
preferential rights without the issuance of new shares or financial
repercussions on Revolut.
Additionally, Revolut consolidated shares by other
major investors like Tiger Global Management. This move aligned with the company’s ambition to enhance its offerings, including potential expansion into lending
products and the protection of customer funds under the UK’s deposit insurance
scheme.
The fintech giant Revolut is contemplating changing
its auditors at a pivotal moment in its endeavor to secure a banking license in
the UK. This is due to a recent disagreement with its audit report by BDO, The
Standard reported.
The audit raised concerns about the completeness and
occurrence of a significant portion of the company’s revenues. This has
triggered a response from Revolut’s executives, including legal action to alter
media coverage.
While the company maintains confidence in
its financial statements, there is uncertainty around the planned changes. In
March, BDO’s audit report raised issues regarding a sum of £477 million in the firm’s financial report, citing
potential misstatements and IT control problems.
Despite considering a shift from BDO, Revolut could
retain the auditors at least until the end of its 2023 financial year. However,
the plans could potentially impact Revolut’s quest for a British banking
license. Revolut has waited for a long time to secure the approval due to audit-related
challenges.
Meanwhile, Revolut recently unveiled plans to grant retail investors access to bond trading in Europe. This move aims to
democratize the corporate and government bond market by lowering the minimum investment amount to €100. With a valuation of approximately €122 trillion, this market has traditionally
been challenging to retail investors.
Revolut’s foray into the bond market is not limited to Europe. It will encompass the US market as well. The fintech firm’s retail
investors will gain access to US government bonds and corporate bonds
from major entities like Wells Fargo and Apple, Finance Magnates reported.
Pursuit of the UK Banking License
Currently, Revolut operates within the European
Union under a Lithuanian banking license. However, the UK remains an important market for the company in terms of revenue. Revolut applied for a banking
license in the country in 2021. However, the company has faced challenges involving the complexity of its ownership
structure. The Bank of England has highlighted multiple share classes as an issue in granting the license.
However, months-long negotiations between Revolut and SoftBank, termed “Project Swan”, led to an agreement to streamline this concern. SoftBank relinquished its
preferential rights without the issuance of new shares or financial
repercussions on Revolut.
Additionally, Revolut consolidated shares by other
major investors like Tiger Global Management. This move aligned with the company’s ambition to enhance its offerings, including potential expansion into lending
products and the protection of customer funds under the UK’s deposit insurance
scheme.
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- Source: https://www.financemagnates.com//fintech/revolut-contemplates-auditor-swap-ahead-of-banking-license-decision/
