Revolut gets UK banking license after three years of waiting, allowing it to offer loans

Money app Revolut has been granted a UK banking licence by the Prudential Regulation Authority after a three-year wait.

In 2021, it applied for a license from the Bank of England for the first time to expand into the United Kingdom.

But Revolut had issues across the app, including failing to publish its accounts on time for two years in a row.

When Revolut’s 2021 accounts were finally published last March, they attracted intense scrutiny after auditor BDO said it could not independently verify three-quarters of its £636m revenue.

But now the regulator has given the bank the green light to enter the “mobilization” stage, upon receiving the concession Banking license with restrictions.

Revolut said this is common among new banks to allow them to complete the development of their UK banking operations before launching into the market.

The bank said there will be no changes for UK customers during this restricted period. UK customers can continue to use their Revolut e-money account as they always have.

Revolut has around 9 million customers in the UK, where it was founded in 2015, and more than 45 million globally.

Revolut already has a banking license in Europe, having been granted one in Lithuania.

Until then, it operated under a UK e-money license, rather than a banking license.

One of the key differences between an e-money and a banking license is that the former allows companies to offer loans.

Companies with a banking license can lend money, while those with an electronic money license cannot.

With a UK banking licence under its belt, Revolut will now be able to offer customers new products, including mortgages, although there is no suggestion that this is currently planned.

It will also be listed on the Financial Services Compensation Scheme (FSCS), allowing it to protect customer deposits of up to £85,000.

“We are incredibly proud to reach this important milestone in the company’s journey and will ensure that we make Revolut the bank of choice for UK customers,” said Nick Storonsky, CEO of Revolut.

Francesca Carlesi, CEO of Revolut UK, said: “Today’s announcement is a huge step forward for Revolut and for our customers. It’s a huge responsibility to be a bank in the UK and we will work tirelessly to deliver products and services that improve the financial lives of everyone who uses Revolut.”