The “rigorous” process Revolut went through to secure its banking licence was right, according to former chief secretary to the treasury, John Glen. He said at a Conservatives event at the annual Tory party conference in Birmingham that the digital payments app now had “credibility to grow globally”.
He said: “The UK is brilliant in innovation in financial services. If you look at when I saw the CEO of Revolut, I said, ‘what can I do?’ He says, ‘get me a banking licence’.
“Well, they got their banking licence after several years. It’s right that it was a rigorous process to get licenced, because now they’ve got the credibility to grow globally out of London, and we cannot compete on a sort of quick and dirty regulation.”
The fintech firm received its licence in July after a three-year wait for authorisation from the banking watchdog, meaning it will be allowed to offer products like mortgages and credit cards alongside its existing e-money services. Glen’s comments came a week after Revolut announced plans to launch a standalone app based on its wealth management offering.
New report has revealed that Revolut was named in more fraud reports than any UK bank last year. The firm came under fire for its approach to dealing with financial crime. Revolut said that it found that most scams reported to them start on three social media platforms.
Almost 55 per cent of scam cases in the second half of 2023 came through Facebook, Instagram and X (twitter). Revolut wants the government to take “urgent measures to stop fraud at source” and for tech and telecoms firms to be held liable for scams that result in customers losing money.
A United States Private equity firm is mounting a second effort to grow its stake in Revolut at a heavy discount after its previous offer was scuppered by the financial regulator.
Jamba Europe, effectively owned by New York-based HOF Capital, has relaunched an offer to buy a “substantial volume” of shares from Revolut investors via the Republic Europe private trading platform.
Republic, formerly known as Seedrs, cancelled Jamba’s original offer on 24 October following pushback from the Financial Conduct Authority (FCA). The FCA previously ruled that communication around the office could be seen as a “financial promotion”, which would need specific regulatory approval.
Republic’s new letter advertising the offer to shareholders was an “approved financial promotion”, a person familiar with the matter said. The FCA declined to comment.
Jamba was soliciting offers through Republic until 4 November and, like its previous plan, would buy shares starting at the lowest price in a reverse price auction.
Republic said in a letter that Jamba considers £407.86 per Revolut shares a “reasonable reflection of the current market price”, based on previous rounds of trading on the platform. But shareholders in the banking app have criticised the move given its roughly 38 per cent discount compared to an August employee share sale, which landed Revolut an implied valuation of $45bn (£34.7bn).
The latest letter from Republic did not mention the August sale, which was brokered by Morgan Stanley and launched at a price of $865.42 per share. A previous letter had also referenced an expected capital gains tax raid in in the recent Budget, which some Revolut investors considered “opportunistic”.
Revolut had concerns about the offer’s discount and “predatory” use of Budget tax fears, a source close to the matter said. Revolut refused to comment. One revolut shareholder said that given the lack of liquidity on the Republic platform, it would be “nonsense to imply” £407.86 truly reflects the market price.
Republic’s chairman, Jeff Lynn, said: “We have structured this offer to mirror the way our secondary market works as far as possible. Our role is to ensure that participants can choose whether to participate.”
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