Revolut’s response to audit report frustrates its own board

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U.K.-based neobank Revolut has left its board frustrated with its handling of a recent audit that raised concerns about the bulk of its revenues.

A month ago, Belgian accounting firm BDO Global warned there was a risk that 75% of the neobank’s 2021 revenue was materially misstated. BDO pointed to the design of the fintech’s IT systems as a possible point of failure, casting doubts on Revolut’s record-setting £636 million revenue in 2021.

In the one month since, Revolut has embarked on a media and legal campaign to dismiss concerns over its revenue. This included a public statement in which it claimed the BDO audit “confirmed that the financial statements give a true and fair view” of its books. It has also sent letters to media houses, requesting them to take down any reports that claim there are concerns around its books.

The firm’s action has angered some of its board members who think the public statement was an “overreaction,” reports Financial Times. Citing sources with links to the board, the outlet reports that the board views the statement as counterproductive.

“The statement was written by people who probably didn’t fully understand the nuancing of an audit opinion,” according to FT, quoting one of the sources.

Revolut’s legal and press departments have been warned against similar actions in the future, at least not before consulting the board.

The firm’s board is chaired by Martin Gilbert, the vice chairman of the U.K.’s largest active asset manager, Standard Life Aberdeen. Other members include ex-Merrill Lynch executive John Sievwright and ex-Goldman Sachs vice chairman Michael Sherwood. Caroline Britton, a former partner at Deloitte, chairs its audit committee.

Revolut’s legal team said the audit meant “that it was not possible to precisely confirm how much [revenue] was attributable to each particular [business] stream but does not refer to lack of verification over revenue overall.”

This attempt has been rebuffed by legal and audit experts. “If BDO felt that the only issue was an allocation issue, they would have worded their opinion to make that clear,” one expert says.

While it made its name as a neobank, Revolut has ventured into digital assets in recent years. In 2021, it became profitable for the first time with a net profit of £26 million, boosted by the digital asset boom.

Watch: What’s next for digital asset exchanges and investment?