Revolut, a United Kingdom-based fintech company, announced on Thursday, April 24, that its annual profit exceeded the $1 billion mark for the first time.
The mentioned result is a major milestone for the specified firm, which is currently preparing to launch its digital bank in the domestic market. It is expected that the process of functioning of the virtual lender will begin before the end of the current year.
Revolut offers consumers a wide range of banking and financial services through the app. On Thursday, the company announced its net profit for last year was 1.1 billion pounds ($1.5 billion). This figure increased by 149% compared to the reading recorded in 2023.
The company’s revenue for 2024 amounted to 3.1 billion pounds. This indicator increased by 72% compared to the result for 2023. The positive data released on Thursday are driven by the upward dynamic across different revenue streams.
Revolut’s wealth unit generated revenue of 506 million pounds last year. This indicator showed an increase of 298% compared to the reading recorded in 2023. Subscription turnover rose by 74% year-on-year, reaching 423 million pounds. The mentioned unit of the company includes the stocks and cryptocurrency trading business.
Revolut also recorded a significant increase in its loan book last year. In this case, the growth was 86% compared to the reading for 2023. The company’s loan book reached 979 million pounds in 2024. Combined with a jump in customer deposits, this contributed to a 58% rise in interest income. The corresponding figure totaled 790 million pounds.
Revolut’s financial milestone was recorded at a special moment in the history of this company, the history of which began almost ten years ago. This thesis implies that the unicorn in the digital banking area is currently preparing to become a fully operational bank in the United Kingdom. Last summer, Revolut secured a banking license. In July 2024, the company was granted a corresponding license with restrictions from the United Kingdom’s Prudential Regulation Authority. This was the final successful point in a long-running application process that began back in 2021. The launch of Revolut’s activities in the traditional banking sector will mean the emergence of a strong competitor, which has excellent experience in the virtual environment for other players in the corresponding functional space.
It is worth noting that, with a high degree of probability, in the foreseeable future, the concepts of digital banking and traditional banking in the practical plane will form a new operational environment in which the definitions of virtual and classical will become conditional in a certain sense. The corresponding assumption is based on the fact that recently there has been a scaling up of the digitalization process of financial institutions that belong to the traditional category. Given that the virtual dimension of reality is becoming more and more massive, the mentioned process is what can be described as one of the logical and natural forms of manifestation of the current stage of global technological progress. From this point of view, there is a possibility that Revolut, while not initially a bank in the classical sense, may become an advanced financial institution at the forefront of the industry’s forward movement in the context of development based on digital transformation. As for the revolutionization of the banking sector in the framework of virtual modernization, one of the most representative examples of this process is the use of artificial intelligence by lenders, active designing of mobile apps, leveraging fintech solutions, and evolving cybersecurity systems.
The restricted license means that Revolut is currently in the mobilization stage. In this case, it refers to the stage when the company focuses on building out its banking operations and infrastructure in the run-up to a full launch. This period typically lasts about 12 months.
Revolut also continues to await regulatory approval for the transfer of all 11 million of its UK users to a new banking entity this summer. After fully up and running, the company will be able to offer loans, overdrafts, and mortgages. For Revolut, in a financial sense, this means the path to new income streams.
Victor Stinga, the company’s chief financial officer, said during a conversation with media representatives on Thursday that the firm aims to formally launch its UK bank later this year. In the relevant context, it was noted that this is a thorough process, and Revolut just pays a lot of attention to this. Victor Stinga also stated that the company works very closely in close contact with the Prudential Regulation Authority and the Financial Conduct Authority. It was also noted that the firm feels like it is making great progress on it.
Victor Stinga stated that the great advantage of becoming a bank in the United Kingdom is the ability to start accepting deposits protected by government guarantees. Licensed banks are also covered by the Financial Services Compensation Scheme. This means that the relevant financial institutions can claim up to 85,000 pounds if they go out of business. Victor Stinga also noted that customers trust banks. It was underlined that this means that consumers in the transition will use Revolut as a primary bank account.
The company’s chief financial officer stated that lending is arguably the biggest roadmap item that this unlocks. In this context, it was also noted that the company is considering the possibility of launching credit cards and personal loans, similar to the products it already offers in the European Union under a separate EU banking license.
Francesca Carlesi, Revolut’s UK boss, said during a conversation with media representatives that the firm views its journey to becoming a bank in the United Kingdom as a crucial step in its global expansion and eventual IPO. She noted that her main strategic focus is making the company the primary bank for everyone in the UK.
It’s worth noting that competitors like Monzo and Starling have had a lengthy head start on Revolut. Monzo received a full banking license in 2017. Starling was granted its own permit in 2016.
As we have reported earlier, Revolut Automates Investments in Singapore With Robo-Advisor.
