/retail banking

News and resources on retail banking, consumer finance and reinventing customer experience in finance.
Revolut soars to record profit

Revolut soars to record profit

Fintech juggernaut Revolut has surged to a record profit of $545 million in 2023, boosting its long-term quest to secure a UK banking licence.

Revolut group revenue increased by 95% from $1.1bn in 2022 to $2.2bn over the course of the past year, aided by record customer recruitment and higher interest rates.

Over the year, Revolut added almost 12m new customers globally, the highest YoY increase in the company’s history, bringing the total to 38m in 2023 as the company diversified its product range and expanded into new markets. Over this time, total customer balances increased from $16.4bn to $22.7bn.

In a further boost to the bottom line, an increasing number of customers have adopted Revolut’s services through paid subscriptions, with 41% growth in customers opting for a paid plan.

Nik Storonsky, CEO of Revolut comments: "Our customer base is expanding at impressive rates, and our diversified business model continues to fuel exceptional financial performance, delivering revenues of over $2.2bn in 2023 and a record profit before tax of $545m. With a net profit of $428m, 2023 was our third profitable year in a row."

Revolut is currently working with Morgan Stanley to sell about $500 million worth of existing shares, including those held by employees, in a bid to push its valuation up to $40 billion,  This comes after an investor revaluation earlier this year placed Revolut’s valuation at $25.7 billion, which was still down from its 2021 valuation of $33 billion.

If it were to reach its aims, it would surpass the market capitalisation of NatWest and Société Générale, and be matching Lloyds Banking Group.

Given the context, Storonsky says the firm remains "committed" to its ongoing UK banking licence application in addition to bringing the Revolut app to new markets and customers around the world.

"Even as we reached 45 million global retail customers six months into 2024, Revolut remains poised for exponential growth in 2024 and beyond.”

Storonsky says the sheer size of the firm has complicated its bid to achieve a banking licence.

In an interview with CNBC, Storonsky said that the company is feeling more confident about securing authorisation, after overcoming some key hurdles in its more than three-year-long journey toward gaining approval from regulators.

“Hopefully, sooner or later, we’ll get it,” Storonsky said. Regulators are “still working on it,” he added, but so far haven’t raised any outstanding concerns with the fintech.

Comments: (2)

Jeremy Light
Jeremy Light - Fourdotzero - London 02 July, 2024, 11:48Be the first to give this comment the thumbs up 0 likes

Remarkable results - the annual report shows 590m monthly transactions as of Dec 23, up 73% on the previous year.

This is a true indicator that Revolut is loved by its customers - "every transaction is a customer interaction".

A Finextra member
A Finextra member 03 July, 2024, 16:48Be the first to give this comment the thumbs up 0 likes

Revolut has certainly come a long way. But why a $2.2 bn revenues, $0.55 bn profit should translate into a $40 bn valuation? Unclear. Profitability needs to be more constant and clearly higher. We have quarterly profits before to become losses later. We have seen mistakes in KYC / AML. We have seen the repeated failure to obtain a UK bank license. Of course you can get a license in some of the smaller more lenient countries of the world who are eager to attract some (FinTech) investments & activities to their country. Good example for the path to follow? NU Bank. Very good at lending and more generally neo banking. Operating in a limited number of countries with a very clear product / services offering. Not the smorgasboard of countries and product / services try-outs of Revolut. It's great that their investors have allowed them to invest everywhere. For $40 bn, for an IPO, for real investors who also want returns Revolut will need to focus and make clearer choices.