Revolut’s operations in Hungary criticised by the Hungarian National Bank

The National Bank of Hungary (MNB) urges Revolut Bank to operate as a domestic subsidiary bank with its registered office in Hungary and sufficient capital strength, under the supervision of the Hungarian central bank, in order to protect domestic customers, the MNB confirmed on Monday.

The statement said, the prudential and consumer protection supervision of Revolut Bank, which provides electronic financial services to domestic customers, is carried out by the Lithuanian supervisory authority where the bank is established. The MNB, as a “host country” supervisor, has only limited powers: customers can take action primarily with the Lithuanian supervisor in case of a breach of interest, and depositors are protected by the Lithuanian deposit insurance scheme.

It was pointed out that the auditor of Revolut Ltd. has indicated that there is a risk that the UK company’s 2021 income statement may contain material misstatements. According to the auditor, three-quarters of the UK company’s revenue – GBP 477 million of which is partly cryptocurrency-based – may be misstated.

The MNB recalled that it had previously been informed by the Lithuanian regulator that the bank intended to establish a branch (not a subsidiary) in Hungary, but that this had not yet taken place.

The Lithuanian Revolut Bank UAB is a subsidiary of the British Revolut Ltd. and currently operates as a cross-border institution, not holding a banking licence in Hungary, they stressed.

The MNB supports fintech innovations that enable simpler, cheaper financial services, but only if they guarantee financial stability and customer safety, the statement underlined.