Revolut, a prominent fintech company, disclosed an unprecedented revenue of £923 million ($1.1 billion) for 2022, propelled by substantial growth in interest income. However, the net profit experienced a sharp decline to £6 million. The delayed annual accounts release on Friday also highlighted the company’s ongoing pursuit of a UK banking license.
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In September, Revolut secured permission to postpone filing its annual accounts for the second consecutive year. The recent auditor’s report provided assurance on the reliability of the 2022 figures. A Revolut spokesperson attributed the decline in net profit to strategic reinvestment, including increased spending on new products, global expansion, and a doubling of the workforce.
The financial report underscored significant increases in staff costs and a doubling of expenditure on advertising and marketing. Remarkably, income from interest on assets witnessed an extraordinary surge, reaching £83 million in 2022—an impressive 4,700% increase from £1.7 million in 2021.
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Gerhard Kling, Chair in Finance at the University of Aberdeen, explained that the revenue surge was primarily driven by the growth in net interest income. This phenomenon was anticipated, given the central banks’ decision to raise interest rates in 2022. Higher interest rates, as noted by Kling, benefit banks and improve their net interest margins.
Despite achieving its first full-year profit of £26 million in 2021, fueled by a surge in cryptocurrency trading, the report unveiled a significant decline in retail investing in crypto and equity markets in 2022. Victor Stinga, the interim CFO, acknowledged this drop in Friday’s report.
Revolut’s ongoing application for a UK banking license was confirmed in the report, with no additional details provided. The company, previously stating it was in the advanced stages of the application process in March, experienced delays in publishing its 2021 accounts. The 2022 accounts also included revisions to certain figures from 2021, with explanations attributing the changes to alignment with current presentation standards, ensuring no impact on net profit for the year.
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