Fintech company Revolut’s revenues rose to a record £923m in 2022, supported by growth in interest income, but net profit fell sharply to £6m, the company said in its late annual accounts today.
Revolut, which has been named the UK’s most valuable startup with a valuation of around $33 billion in 2021, has applied for a banking license in the UK but is still awaiting approval.
The company said in September that it had been granted permission to delay filing its annual accounts for the second year in a row. The auditor’s report published today said that he was able to obtain sufficient evidence for the 2022 numbers.
A Revolut spokesman said the decline in net profit was due to reinvesting back into the business. Revolut said it has increased spending on new product launches and global expansion, as well as doubling its headcount.
The report said staff costs jumped, and spending on advertising and marketing doubled.
Income from interest on assets rose to £83m in 2022, up about 4,700% from just £1.7m in 2021, Revolut said.
Gerhard Kling, head of finance at the University of Aberdeen, said revenues were driven by the increase in net interest income, due to central banks raising interest rates in 2022.
“This is not a huge surprise because interest rates have gone up, so all banks will benefit from that and their net interest margins will improve,” Kling said.
Revolut made its first full-year profit in 2021, worth £26m, thanks to a boom in cryptocurrency trading.
But retail investment in cryptocurrency and stock markets fell “significantly” in 2022, interim CFO Viktor Stenga said in a report today.
Revolut CFO Mikko Salovaara left the company in May.
The company’s accounts for 2021 were also delayed, and when they were finally published in March 2023, audit firm BDO said at the time it was unable to independently verify three-quarters of revenues of £636m. The warning has drawn scrutiny from regulators.
Revolut said its application for a UK banking license “remains ongoing”, but did not provide further details. The company said in March that it was “in the advanced stages” of the application.
The company’s 2022 accounts included a number of revisions to the numbers contained in the 2021 accounts. For example, the average monthly number of employees for 2021 was revised to 2,365 from 4,655.
Revolut said in the report that the changes were made “to align with current year’s supply standards” and had no impact on net profit for the year.
Nick Storonsky, CEO of Revolut, said that the fintech strengthened its financial position, grew its customer base, launched several new products, expanded into new markets, and strengthened its risk, compliance and governance infrastructure during 2022.
“Looking to the future, our focus is on continued growth in all our markets,” the CEO said.
“We recently surpassed 35 million customers globally, who together handle more than half a billion transactions per month, as well as the launch of Revolut 10, our most significant overhaul of app design and layout to date,” he said.
He added: “These are great achievements, but we are not slowing down. Rather, we aim to multiply this number 10 times, and push towards 350 million customers and more.”
Last year, Revolut launched IBAN numbers for its Irish customers, while also launching Pay Later services here for more than 2 million customers. It also offers credit cards, small loans and car insurance to its Irish customers.