Revolut has edged closer to securing a long-sought-after banking licence in the UK after agreeing to a simplified ownership structure with primary stakeholder Softbank.
Having been instructed by the Bank of England to collapse its six classes of shares into one after applying for the licence two and a half years ago, the agreement comes following months of stalemate between the pair, the Financial Times reported.
Agreements had already been reached with Revolut’s other investors, though Softbank resisted in a bid to secure compensation for giving up its priority class of shares.
The in-principle deal will not see new shares issued to Softbank, however, nor will it cause a financial hit to Revolut, according to the FT.
If the deal is ultimately agreed, the US$33bn-valued fintech startup will have moved past a key obstacle in its two-year bid to secure a licence from the Bank of England’s Prudential Regulation Authority (PRA).
This would also have to be approved by the UK’s Financial Conduct Authority (FCA).
Revolut, whose founders Nikolay Storonsky and Vlad Yatsenko hail from Russia and Ukraine respectively, has previously faced scrutiny over concerns of auditing, compliance and corporate culture issues by the regulator, with reports emerging earlier this week over claims it allowed funds to leave accounts flagged by the National Crime Agency.
The startup published its long-delayed 2021 results in March with auditor BDO warning that some information “may be materially mis-stated” as it was unable to satisfy itself of the “completeness and occurrence” of revenues.
The fintech tried to play it down, to much consternation from its own independent board members, the audit industry and perhaps also the PRA.
Not long after, the company parted ways with its chief financial officer and there were reports that the long-awaited banking licence application would again be rejected by the PRA, which has still doled out licences to more than 30 new banks in the past 10 years.