editorial
Revolut, the digital bank, has reached a deal with SoftBank, its primary backer, regarding a change in shareholding structure. This strategic move is seen as a significant step towards obtaining a banking license in the UK.
According to reports, the Bank of England’s Prudential Regulation Authority (PRA) had instructed Revolut to simplify its ownership structure by consolidating its six different classes of shares into one. This was a necessary condition for acquiring a banking license. While other investors agreed to transfer their shares to a single class, SoftBank had been reluctant to do so unless it received double the number of shares from Revolut in return for giving up its preferential rights.
After several months of discussions, Revolut and SoftBank have finally resolved the issue. The agreement reached does not involve the issuance of new shares to SoftBank and will not have a significant financial impact on the company, according to the Financial Times.
Revolut has been waiting for two and a half years to obtain a UK banking license, with the process being delayed due to concerns raised by the Financial Conduct Authority (FCA) regarding auditing, compliance, and corporate culture. The FCA had also been investigating whether Revolut allowed funds to be transferred from flagged suspicious accounts, as reported recently.
In addition, the filing of Revolut’s annual accounts for 2021 was delayed for the second consecutive year. Although the accounts were eventually submitted in March, auditor BDO flagged issues with verifying or confirming the £477 million of revenue and the completeness or occurrence of transactions due to the company’s internal IT systems.
Revolut’s agreement with SoftBank brings hope that it will soon be granted a UK banking license, overcoming the obstacles it has faced in recent years.
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