British fintech firm Revolut has been granted an extension for filing its 2022 financial accounts, marking the second consecutive year the company has secured such permission. According to Companies House, the UK’s public registry of businesses, the original deadline for filing was September 13.
A spokesperson for Britain’s most valuable start-up confirmed the news for Reuters, stating, “We have received an extension for the filing of our 2022 accounts. We look forward to sharing our 2022 audit and annual report in due course.”
The incident is expected to increase the challenges faced by the fintech company, which is already under significant pressure.
Revolut faced delays in securing a UK banking license, partly due to concerns raised during the publication of its long-delayed 2021 accounts in March 2023. At that time, BDO LLP, the UK’s fifth largest accounting firm, said it had been unable to fully verify nearly £500 million of revenues, adding that “the risk of an undetected material misstatement was unacceptably high” due to the configuration of Revolut’s internal IT systems.
The challenger bank responded to the auditors’ concerns, stating that they relate to revenues rather than the company’s balance sheet. However, it appears that the PRA remains unconvinced and is likely to proceed with rejecting the application based on its assessment of Revolut’s financial position.
Revolut has been grappling with longstanding issues related to its reporting procedures, which have marred its reputation. Notably, the UK’s Financial Reporting Council, responsible for overseeing auditors, deemed Revolut’s 2020 audit as “inadequate” and highlighted the unacceptably high risk of undetected material misstatements.
Revolut also fell victim to organized criminal gangs who exploited a flaw in its US and European payment systems, resulting in the theft of over $20 million. The incident, which stemmed from differences between the app’s US and European subsidiaries, allowed some declined transactions to be erroneously refunded. This allowed the criminals to withdraw the refunded amount from receiving accounts via ATMs for several months last year.
Revolut managed to recover a portion of the funds that were stolen, amounting to approximately $23 million. However, even with these recovery efforts, the net loss incurred by the company amounted to nearly two-thirds of Revolut’s annual net profit in 2021.
The issue, which has not yet been disclosed publicly, was initially identified in late 2021, and criminals took advantage of the loophole throughout the early part of 2022. A partner bank in the US raised concerns when it discovered a cash shortfall, prompting the flaw to be addressed by spring 2022 after the US subsidiary requested additional cash injections.