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Dive Brief:
- Digital bank Revolut Group CFO Mikko Salovaara will be departing the company after two years in the top financial seat, the company said Thursday. Salovaara will be departing due to ‘personal reasons,’ according to reports regarding his departure.
- Salovaara’s departure follows news that James Radford, the CEO of Revolut NewCo UK — the entity designed to host the digital bank’s U.K. banking license — left the entity in late April, according to filings with the Companies House, the United Kingdom’s corporate registry.
- Both Salovaara’s and Radford’s departures come as the company faces persistent regulatory challenges, including concerns related to its 2021 financial statements flagged by a recent audit.
Dive Insight:
In addition to other financial services, Revolut provides payments services, including international money transfers and peer-to-peer payments. Using the company’s app, consumers can also split payments for bills.
Salovaara joined the London-based digital bank in 2021 as a vice president of finance and was shortly elevated to the group CFO position later that year, according to a company press release. Before moving to Revolut, he served as an investor for the big Brazilian-American investment firm 3G Capital and held various CFO roles at one of its portfolio companies, the consumer goods business Kraft Heinz, according to his LinkedIn profile.
Revolut has been left in limbo waiting for its U.K. banking license for more than two years, with CEO Nik Storonsky pointing to the recent turmoil in the banking industry as a reason for the current delays, according to a Financial Times report. Salovaara had said the license was coming “any day now” in early March.
A darling of the digital fintech boom, Revolut’s quick expansion — with the company’s valuation swelling to a peak of $33 billion in 2021 — has been recently followed by a series of challenges, according to a report by The Guardian.The company has faced lagging technology and IT hiccups, regulatory fines and allegations of a toxic workplace culture that led to the departure of key employees over the past few years.
Regulators slapped the company with numerous fines due to data breaches, late account files and other issues. The company has had regulatory troubles with the central bank of Lithuania, where it received its European Union banking license in 2018. Last November, the central bank fined the company €70,000 for failing to file audited financial accounts on time.
The beleaguered fintech’s regulatory and financial hiccups are also far from over, as the company’s independent auditor, BDO Global, recently flagged concerns about Revolut’s delayed 2021 financial accounts. BDO was unable to independently verify three-quarters of the €636 million in revenue Revolut reported in its delayed 2021 accounts, the auditor said in its report.
“As described in the basis for qualified opinion section of our report, we were unable to satisfy ourselves concerning the completeness and occurrence of certain revenues for the year ended 31 December 2021,” BDO said in the opinion section of Revolut’s delayed 2021 statements. “We have concluded that where the other information refers to revenue or related balances these may be materially misstated for the same reason.”
Revolut posted its first full year of profit in 2021, with £26.3 million in net income, it said in March.
Revolut did not immediately respond to requests for comment regarding Salovaara’s departure.
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