Revolut CEO remains optimistic about obtaining a UK bank license as the fintech company records a record $545 million profit.

• After overcoming key hurdles, Nikolay Storonsky, Revolut's CEO and co-founder, stated that the company is feeling confident about securing its British bank license "soon."
• In 2021, Revolut applied for a U.K. banking license, but it has experienced significant delays.
• Revolut reported a full-year pre-tax profit of $545 million in 2023, attributed to robust user growth and revenue diversification.

Revolut's CEO is hopeful about obtaining a U.K. banking license due to the company's surge in users and record pre-tax profits.

Revolut's CEO and co-founder, Nikolay Storonsky, stated in an exclusive interview with CNBC that the company is optimistic about obtaining its British bank license, following the successful completion of crucial obstacles during its more than three-year quest for regulatory approval.

Storonsky stated via video call to CNBC that he hopes to obtain it soon, but regulators are still working on it and have not raised any concerns yet.

Revolut's large size has slowed down the approval process for its banking license, according to Storonsky. In contrast, several small financial institutions have obtained a banking license with minimal customer base.

"Storonsky stated that smaller companies in the U.K. are being granted banking licenses. These approvals usually occur twice a year, and the institutions tend to be smaller in size. However, as a large institution, it takes longer for us to receive approval."

Revolut, a licensed electronic money institution in the U.K., is not yet able to offer lending products such as credit cards, personal loans, or mortgages. However, obtaining a bank license would allow it to do so. The company has experienced significant delays in its application process, which it submitted in 2021.

The inconsistency of the company's share structure with the Prudential Regulation Authority's rulebook posed a significant challenge.

Revolut had various classes of shares with preferential rights, but as a condition for obtaining its U.K. banking license, the Bank of England required the company to consolidate its six share classes into ordinary shares.

SoftBank has acquired Revolut's shares in the company, resulting in a unified class and the relinquishment of preferential rights, as reported by the Financial Times.

2023 a 'breakout year'

The fintech giant reported a full-year pre-tax profit of £438 million ($545 million) in 2023, a significant improvement from the pre-tax loss of £25.4 million in 2022. Additionally, the group's revenues increased by 95% to £1.8 billion ($2.2 billion) in 2023, compared to £920 million ($1.1 billion) in 2022.

Revolut's growth was attributed to a significant increase in user numbers, with the addition of 12 million customers in 2023, as well as impressive performance across all its core business areas, including card fees, foreign exchange, wealth, and subscriptions, by Victor Stinga, Revolut's chief financial officer.

Stinga stated in an interview this week that 2023 is expected to be a breakout year for growth and profitability, according to his perspective.

Stinga stated that revenue growth at Revolut was primarily due to three factors: customer growth, strong performance in key revenue areas, and a substantial increase in interest income, which now accounts for approximately 28% of the company's revenues.

Revolut made financial discipline a top priority in 2023 by controlling operating expenses and implementing a "zero-based budgeting" approach, requiring justification and accountability for every new expense.

Stinga stated that while admin expenses grew by 49%, revenues nearly doubled year-on-year.

Revolut has been investing more aggressively in advertising and marketing, with the firm having deployed $300 million in advertising and marketing last year. Additionally, the company's business banking solutions are a top priority, with Revolut dedicating approximately 900 employees to business-to-business sales.