UK fintech firm Revolut, backed by Japanese investor SoftBank (TYO:9984), has reached an agreement to consolidate its six share classes into a single class, a move that is crucial for obtaining its long-awaited UK banking license. The Bank of England's Prudential (LON:PRU) Regulation Authority had mandated this consolidation, which includes SoftBank's priority and preference shares. This agreement was reported on Thursday.
In earlier negotiations, SoftBank had expressed concerns over the loss of preferential rights and demanded significant compensation for relinquishing these shares. However, the recent deal ensures no additional "top-up" shares for SoftBank and confirms that there will be no financial repercussions for Revolut.
While this represents progress towards securing a UK banking license, Revolut continues to face other challenges. The company has been under scrutiny from the Financial Conduct Authority over suspicious transactions in certain accounts. Additionally, auditor BDO raised issues with Revolut's internal IT systems that hindered confirmation of the £477m revenue. This delay in filing annual accounts adds another layer to the bank's complexities.
Despite these hurdles, the simplification of the share structure marks a significant step forward for Revolut in its pursuit of a UK banking license. The agreement with SoftBank not only satisfies a key condition set by the Bank of England but also alleviates potential financial strain on the fintech firm.
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