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International Internet Magazine. Baltic States news & analytics Friday, 29.03.2024, 15:35

Revolut says it came to Lithuania to do business

BC, Vilnius, 28.01.2019.Print version
Revolut's top executives say the UK-based fintech startup has ambitious business goals in Lithuania and does not intend to get involved in politics, but admit that while doubts about the transparency of the firm's operations may affect its relationship with partners, negative publicity has helped attract more customers, informed LETA/BNS.

Revolut CEO Nik Storonsky told  that the startup, which is looking to launch specialized bank services in Lithuania in the first half of this year, will start in a more conservative, low-risk way. 

 

He said allegations about Revolut's links to Russia are just a situation the firm has to deal with, but hopes that these "baseless" fears will go away. 

 

"In reality, customers love us, we built the best product. So, in terms of our relationship and trust with customers, not at all (it won't affect our business). However, negative PR does affect in the way that potentially can damage our relationship with other partners that we work with," the CEO told.

  

"Funny enough, it actually increased our growth in Lithuania, so we were actually growing double speed. We now have 170,000 (mobile application) customers in Lithuania, and we are growing 300-400 a day," he said. 

 

Storonsky added that Revolut, as "a regulated financial institution", would be obliged to provide Lithuanian law-enfacement bodies with additional information if requested. 

 

Revolut plans to attract 30 mln euros in deposits in its first year of operation as a specialized bank in Lithuania and another 60 mln euros in the second year. It will not pay interest on deposits initially, but may do so in the future.    

 

"We plan to take, first year, I think, around 30 mln euros in deposits (and) 60 million euros in year two. So, for us priorities at the moment (are) to be sleek as product, as a bank, and stable. For us it's a new activity and we want to get it right," Storonsky said. 

 

Chad West, head of global marketing and communications at Revolut, said the startup plans to offer small personal loans at interest rates lower than most banks charge. 

 

"We have not finalized our business plan for Lithuania yet in terms what APR (annual percentage rate) might look like. But to give you a view (...), most banks charge 22% APR on average for a personal loan, Revolut will vary between 8-14% depending on your credit score (speaking about the situation in the UK). It gives people access to money, where big banks won't give it to them," he said.

 

When asked about competition with conventional banks in Lithuania, Revolut's executives said they do not intend to compete just for the sake of competing.

 

"My plan is to build a global company, an Amazon of banking, which means, we compete with banks. It doesn't mean that we are particularly trying to compete with Lithuanian banks, we are just trying to build the best product," Storonsky said.

 

Revolut said they have serious and long-term plans for Lithuania and do not consider the country as a springboard to larger markets. 

 

"Lithuania is the hub of our European operations. Of course, we may have to get a UK banking license because of Brexit, but Lithuania will be the hub for the whole of Europe," West said. 

 

"We had every country practically begging for Revolut to come. And Lithuania has the best vision, in our view. It's definitely not a springboard," he said.

 

Storonsky said, "We definitely want to have a good long term relationship with Lithuania". 

 

Lithuania in December became the first European country to issue Revolut with a specialized bank license. 

 

A week later, Stasys Jakeliunas, chairman of the Lithuanian parliament's Committee on Budget and Finance, asked law-enforcement and intelligence bodies to look into the fintech firm's business model and its possible links to Russian politicians.

 






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