UK-based challenger bank Revolut has recorded an operating loss of $280 million for the 2020 financial year amid rapid global expansion.
According to the company’s annual report for last year, administrative expenses more than doubled in 2020 from £125 million ($174 million) to £266 million ($370 million), mainly driven by staff costs alongside risks and compliance spending.
Elsewhere, the company, which is in the process of increasing its cryptocurrency offering, recorded an adjusted revenue of £261 million ($363 million), an increase of 57%. Notably, the revenue entails about £39 million ($54 million) gain in digital currencies.
Initially, Revolut CEO Nik Storonsky had indicated how the fintech reacted to the pandemic. The executive stated that the pandemic was an opportunity to cut costs and repurpose the business. The company placed more focus on profitable ventures like stock trading and crypto.
“Now, every single P&L [profit and loss] line is actually above Covid, some two, three, four or five times above Covid. The pandemic was initially a painful experience but overall very positive for us because it allowed us to focus on the right product lines,” said Storonsky.
In general, the revenue is due to fees on prepaid cards and new clients. At the end of 2020, Revolut had 14.5 million retail customers, while commercial customers surged to almost half a million.
Revolut Q1 2021 revenue surges 130%
At the start of 2021, Revolut recorded an increase in revenue by 130% in the first quarter. Besides reaping from the impact of the coronavirus pandemic, Revolut first-quarter revenue also resulted from a boom in retail investors.
Revolut has also applied for a banking licence in the U.S. while also focusing on other markets like Asia. In January, the startup also applied for a British banking license to expand its lending activity. In addition, as previously reported by Finbold, the company has also applied for an e-money license in Ireland and plans to apply for an Irish bank license.