Revolut Reports Record Profits and Hints at IPO Plans: PayRate42 Reiterates Green Ratings

London-based fintech giant Revolut has achieved record-breaking annual profits, reinforcing its strong market position and hinting at imminent plans for an Initial Public Offering (IPO). Despite ongoing delays in securing a UK banking license, the company's stellar performance has led PayRate42, a leading cyberfinance rating agency, to maintain its Green Compliance and Green Risk ratings for Revolut. These ratings reflect the company's adherence to regulatory standards and its robust risk management framework.

Impressive Financial Performance
Revolut 2023 annual report with impressive numbers
The 2023 Annual Report shows that, at year-end 2023, the Revolut customer base grew from 26.2 million to 38.0 million, a nearly 45% increase. Revenue increased from £0.92 billion in 2022 to £1.80 billion, marking a 95% increase. Similarly, profit before tax grew to £438 million in 2023, and net profit grew to £344 million.

This impressive financial achievement is attributed to rising interest rates and a strategic expansion plan.

Regulatory Hurdles
While Revolut continues to experience phenomenal growth and works with banking licenses in 30 regulatory regimes, it faces challenges in securing a UK banking license. This process has been ongoing for over three years. The license would enable Revolut to hold customer deposits and fund its own-branded loans and mortgages, potentially opening new revenue streams in the important UK market. Success in the UK could also positively influence regulatory decisions in other major markets, including the US.

The delay in obtaining the license is partly due to the need to address previous accounting and reputational issues. Revolut has faced scrutiny over EU regulatory breaches, questions surrounding its corporate culture, and the late filing of its accounts. However, the company remains committed to resolving these concerns and continues to work closely with the Prudential Regulation Authority on its application.

Steps Toward an IPO
In its annual report, Revolut hinted at preparing for a potential IPO. The company highlighted its efforts to enhance financial controls to meet the standards expected of publicly listed companies. This move comes a year after auditor BDO reported challenges in obtaining a complete picture of Revolut's revenue, which led to concerns over possible material misstatements. Revolut has since improved its processes, allowing BDO to gain a better understanding of its operations and release financial results more promptly.

Executive Compensation
In 2023, Revolut more than tripled the salary of its highest-paid director, the co-founder and CEO Nik Storonsky, to £333,000 from £100,000 the previous year. However, his overall compensation dropped significantly due to a substantial share payout in 2022, reducing his total pay from £17.8 million in 2022 to £378,000 in 2023.

Rating Conclusion
Revolut's record profits and strategic preparations for an IPO demonstrate its robust financial health and growth potential. Despite the ongoing challenges in securing a UK banking license, the company's proactive measures to enhance its financial controls and resolve regulatory concerns position it well for future success.

PayRate42's reaffirmation of its Green Compliance and Green Risk ratings underscores Revolut's commitment to maintaining high standards of regulatory compliance and risk management. As Revolut continues to navigate the complexities of the fintech landscape, its strong performance and strategic initiatives signal a promising outlook for the company's future.

Go to the Revolut profile on PayRate42:
https://payrate42.com/listings/revolut/

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PayRate42 is a rating agency specializing in payment processors. Our main goal is to protect merchants and consumers by providing transparency through the evaluation and rating of financial service providers. High-Risk Payment Processors (HRPP) operating outside the established regulatory framework are our primary focus.

This release was published on openPR.