Revolut comes one step closer to UK licence after entering deal with SoftBank
Fintech Revolut has moved one step closer to securing a UK banking license, as it signed a share deal with its Japanese investor SoftBank to break down a major barrier.
The Bank of England ordered Revolut to collapse its six classes of shares into one as a requirement for a full licence, the Financial Times said, which has now been pending for two and a half years.
Successfully applying for a banking licence would require Revolut to get rid of preference shares held by investors, such as SoftBank.
Revolut first applied for a UK banking licence in 2021 but has been on a two-and-a-half year hunt ever since. Its boss Nikolay Storonsky previously criticised the pace of regulators, telling City A.M. last year that the UK was slow compared to competitor markets.
The fintech had deemed the licence to be “imminent” in March, but authorisation from the Prudential Regulation Authority had not been forthcoming.
Revolut received an extension from Companies House last month to file its annual results for the second consecutive year.
Following negotiations over a period of a few months, otherwise known as “Project Swan,” sources told the FT that SoftBank demanded “stiff ” compensation for its priority class of shares.
The latest agreement does not include any new “top-up” shares or financial impact for SoftBank, according to the report.
Although the Bank of England is the lead agency for banking licence approval, the Financial Conduct Authority must also have a say.
Other investors have agreed to, or are considering to, transfer their shares into a single class, the paper said, including Tiger Global Management, venture capital firm TCV, Balderton Capital and Ribbit Capital.
The FCA, SoftBank, and the four investors mentioned were contacted by City A.M. for comment.
The fintech’s results had been due in September, nine months after the end of its financial year, but the body granted an extension to file its accounts for 2022 to the end of December.
Revolut and the Bank of England declined to comment.