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The British-headquartered fintech has been granted a full banking licence from the European Central Bank (ECB).
Christmas has come early for Revolut as its banking operations are able to expand, thanks to a new licence granted by the ECB. This will see the institution’s banking and payments services merge into one.
Revolut was first recommended for a change in licence by its national supervisor in the EU, the Bank of Lithuania, which began proceedings at the start of October.
After extending and supplementing the licence, Revolut Bank UAB will complement its current main activities — accepting deposits and granting loans — with the payment services that were previously provided by a separate arm of the company, Revolut Payments UAB.
Like Revolut’s banking services, Revolut Payments was first granted an electronic money institution licence in 2018.
As of the end of 2021’s third quarter, Revolut Bank UAB has received resident deposits of €395m and has provided almost €12m in loans to Lithuania residents.
Meanwhile, Revolut Payments UAB currently occupies more than half of the electronic money and payment institutions sector in Lithuania, while carrying out payment transactions that come to €100bn, and receiving nearly €170m in operating income.
Revolut has developed into one of the fintech success stories in recent years. It was started up in 2015 by Nikolay Storonsky and Vlad Yatsenko, and by 2018 it had a £4.2bn valuation.
An $800m funding round in July 2021 brought the value of the company to $33bn, making it the most valuable UK technology start-up in history.
Revolut is one of many institutions that has chosen Lithuania as its base in the trading bloc.
Post-Brexit, Lithuania became a particular beneficiary as fintech companies scrambled to maintain an EU licence following the loss of passporting options from London.
Yapily and Curve also chose the Baltic country to set up their European office following Brexit.
Revolut’s success in obtaining a full banking licence in the EU will be welcomed by its chief executive, Nik Storonsky, who has also set his sights on obtaining a bank licence in the UK. He told a banking summit in September that he hopes this will be achieved by early 2022.
The company also applied for a banking charter in the United States this year, both with the Federal Deposit Insurance Corporation and California’s Department of Financial Protection at state level.
