Badenoch to meet Revolut amid fears it will quit UK
British fintech titan gets French and Spanish offers amid fears it may go over high taxes and red tape
KEMI BADENOCH, the Business Secretary, is seeking an emergency meeting with Revolut over fears the $33bn (£26bn) technology company may abandon the UK amid frustration with high taxes and red tape.
Department for Business and Trade sources confirmed it wanted to meet with Nikolay Storonsky, chief executive of Revolut, just days after he attacked Britain’s “extreme bureaucracy”.
Officials in France and Spain have courted Revolut, which is headquartered in London, in recent weeks as bosses grow frustrated over delays in securing a UK banking licence.
Revolut said: “We’re a British company and London is our home.” The spokesman did not respond when asked whether Revolut would accept the department’s request for a meeting.
Mr Storonsky criticised Britain on Friday, saying it was hard to do business and he would never choose it as a place to list the company. He said: “In the UK there are higher taxes to pay and an extremely bureaucratic regulator”.
He went further yesterday when he criticised the Financial Conduct Authority’s (FCA) delays in granting it a banking licence, which the company views as crucial to offer loans and other services to its 5.8m UK customers.
“Ultimately it is not really us, it is generally the banking crisis we see at the moment that makes regulators extra cautious,” he told the Financial Times.
Rival challenger banks Monzo and Starling hold full UK banking licences, unlike Revolut. The company has been pursuing an application with the FCA and Prudential Regulation Authority (PRA) for about two years.
Revolut became the UK’S most valuable fintech in 2021 after a funding round earned it a $33bn tag. Last year it overtook Checkout.com as Europe’s most valuable start-up after the payments company had its valuation slashed.
However, some of Revolut’s investors have since written down their stakes, with Schroders reducing the value of its £10.1m stake by almost half in April.
The write-down suggests Revolut’s overall value may have shrunk to $17.7bn, a loss of $15bn in two years.
Revolut’s finances have been under the spotlight in recent months after it was late filing its annual accounts with Companies House following concerns raised by its auditor.
BDO, the UK’S fifth largest accounting firm, said in March: “We were unable to satisfy ourselves concerning the completeness and occurrence of certain revenues for year ended Dec 31 2021”.
They were unable to verify £477m of Revolut’s £636m in sales for the year.
BDO said Revolut’s internal IT systems were “not able to provide sufficient appropriate assurance” over revenue streams from areas of the business including its foreign exchange and wealth department, which includes revenues from cryptocurrency trading.
No warning was issued by BDO over Revolut’s ability to continue as a going concern. Auditors were able to verify 100pc of customer cash balances held on customers’ behalf with third parties.
Mr Storonsky accused the regulator of putting pressure on BDO and said the IT problem had since been fixed.
“The regulators pressed BDO and as a result it was much more rigorous and risk averse and so delayed the accounts, because the regulator was on their back,” he said.
Revolut is the latest to criticise Britain’s trading environment. Softbank, the Japanese investment fund which owns the computer chip designer Arm, in March rejected Rishi Sunak’s personal pleas to list the business in London, opting instead for the US.