Fintech giant Revolut is contemplating changing its auditors at a crucial time in its effort to secure a UK banking licence. This follows a recent turmoil involving its audit report by BDO, The Standard reported.
The audit raised concerns about the integrity and occurrence of a significant portion of the company’s revenue. This has sparked a response from Revolut executives, including legal action to alter media coverage.
While the company officially remains confident in its financial statements, there is uncertainty around the anticipated changes. In March, BDO’s audit report raised issues relating to the integrity and occurrence of a sum of £477 million in the company’s financial report, citing potential errors and IT control issues.
Despite considering a BDO switch, Revolut could retain the auditors at least until the end of its 2023 financial year. However, the plans could affect Revolut’s pursuit of a British banking license. Revolut has waited a long time to get approval due to audit-related challenges.
Meanwhile, Revolut recently revealed plans to give retail investors access to bond trading in Europe. This measure aims to democratize the corporate and government bond market by reducing the entry barrier to 100 euros. With a valuation of approximately €122 trillion, this market has traditionally been a challenge for retail investors.
Revolut’s foray into the bond market is not limited to Europe. It will also cover the US market. The fintech company’s retail investors will have access to trade US government bonds and corporate bonds from major entities such as Wells Fargo and Apple, Finance Magnates reported.
Search for UK banking license
Revolut currently operates within the European Union under a Lithuanian banking license. However, the UK remains a key market for the company in terms of revenue. Despite Revolut’s application for a UK banking license in 2021, obstacles remained, particularly complexity within its ownership structure. The Bank of England has highlighted its multiple share classes as a challenge to licensing.
However, months-long negotiations between Revolut and SoftBank, dubbed “Project Swan,” led to a beneficial deal to simplify this concern. SoftBank gave up its preemptive rights without the issuance of new shares or financial implications for Revolut.
Additionally, the company consolidated shares from other major investors such as Tiger Global Management. This move aligned with Revolut’s ambitions to improve its offerings, including potential expansion into credit products and protecting customer funds under the UK deposit insurance scheme.
