The market leader among European neobanks’ losses have burgeoned despite the pandemic creating ideal conditions for the sector to flourish.
Revolut, which is also the leading neobank in Switzerland, posted a 2020 loss of £168 million ($233 million), 57% more than it lost in 2019, because of an increase in personnel and greater investment in compliance.
Revenues Amid Travel Slump
Revolut said in its results statement that revenue grew 34% despite international payment volumes shrinking to two thirds of pre-pandemic levels. The neobank’s range of services includes pre-paid debit cards which are often less expensive for payments abroad than those of conventional banks, meaning many users use Revolut as a travel payment app.
In the second half of the year these effects were more than offset by increases in other product areas including subscriptions, trading and business, the bank said.
CFO Mikko Salovaara told the «Financial Times» (behind paywall) that he expects the company to remain profitable.
«We continue to expect to be profitable, (but) the rates in terms of growth and profitability are difficult to forecast,» Salovaara told the FT.
Revolut intends to enter the loans market and is seeking banking licenses in the U.S. and U.K. It has 350,000 users in Switzerland.
