SIMPLIFY
ALL THINGS
MONEY
2022 Annual Report andConsolidated Financial Statements

Contents
03

Strategic Report
04
06
08
12
16
24
28
32
33
37
43

58

Board Of Directors

61

Directors’ Report76

Independent Auditor’s Report

82

Financial Statements
83
84
86
88

90

#1 FINANCE APP
IN 9 EUROPEAN
COUNTRIES

By downloads
2023 Q1-Q3

Revolut Annual Report 2022

STRATEGICREPORT

Our 2022 Highlights
Chair's Statement
Chief Executive Officer’s Review
Chief Financial Officer’s Review
General Overview
Business Performance
Our Business Model & Strategy
Engaging with Stakeholders
Environmental, Social and Governance (ESG)
Our People
Chief Risk and Compliance Officer’s Review

Revolut’s revenue steeply increased 45% year-on-year to £923m and saw balanced
growth across our different business units, yet another validation of our diversified
and robust revenue model.

Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows

Notes To The Consolidated
Financial Statements

REVOLUT BANKIN 30 COUNTRIES

35M CUSTOMERSIN 38 COUNTRIESOctober 2023

2

Revolut Annual Report 2022

3

Strategic Report

2022 Highlights

Chair's Statement

2022: AnotherYear of GrowthChief Executive Officer’s Review

Chief Financial Officer’s Review

REVENUE

Strategic Report

2022 Highlights

Chair's Statement

Chief Executive Officer’s Review

DEPOSITS↑ +45%

Chief Financial Officer’s Review

EMPLOYEES

2022

£923M

RETAIL CUSTOMERS↑ +71%↑ +60%

2021↑ +112%

2022

£638M

£12.6B

2022

5,913

2022

26.2M
2021

£7.4B

2021

16.4M

2021

2,795

MONTHLY
TRANSACTIONSOUR AWARDS
AND RECOGNITION↑ +71%
2022

341M
LinkedIn Top Startup award in the UK
for the fifth consecutive year

2021

International Customer ExperienceAward 2022 (iCXA)

199M

Revolut Annual Report 2022

4

Revolut Annual Report 2022

5

Strategic Report

2022 Highlights

Chair's Statement

Chief Executive Officer’s Review

Chief Financial Officer’s Review

Strategic Report

Chair's
Statement

Chair

Chief Executive Officer’s Review

Chief Financial Officer’s Review

Our Revolut Partnership Programme entered its second year in 2022. The partnership
recognises senior leaders in the company who champion our values and whose
contributions are critical to propelling Revolut forward. During 2022, the partnershipgrew to 26 (from 17 in 2021). I am delighted for the 2022 partner class, all of whom
have demonstrated an ongoing commitment to our success. In addition to serving ourcustomers and delivering for our stakeholders, our partners have focused on taking
care of our people. We have a long-standing commitment to recruiting, developing
and promoting the best talent available with the widest range of backgrounds,
experiences and perspectives. In addition to expanding our global partnership, we
expanded our Executive Committee to 20, to ensure a healthy representation of
product, business and control functions and to empower even more of our team to be
key decision-makers for the company.
The safety and well-being of our employees is always our top priority, and more sothan ever before in 2022 for our Ukrainian colleagues and their families, where we
immediately arranged evacuations and, where possible, facilitated relocations to ourother locations around the world. Recognising the immense strain on our staff, we
introduced mental health support and an emergency fund to support the families ofcolleagues who had to flee their homes. As of today, we have 45 Revoluters in Ukraine
and as a firm remain committed to their ongoing support and wellbeing.

Across 2022, we made significant investments in our
products, technology, risk, compliance and governance,
while exercising strict cost discipline. We made prudent
growth investments in strategic markets with the launchof our biggest ever brand campaign, 'Your Way In'. We also
made significant investments in our people, particularly incustomer support and financial crime. I remain proud of
Revolut’s resilience and of what our colleagues around theworld have achieved, collectively and individually.

Board Governance andRisk Management

Our relentless focus on risk management and comprehensive controls over all our
activities helped us guide and support our product and business teams throughout
the year — especially during these challenging macroeconomic times of doubledigit inflation. During 2022, we embedded a proportion of our risk and complianceemployees within first-line product teams, to ensure that risk and compliance are built
into our products by design, while maintaining oversight with an emboldened secondline. We also kickstarted a major project to prepare for the new Consumer Duty
regime in July 2023. The focus on Consumer Duty throughout our product lifecycle
highly complements our Deliver Wow company value, which puts customer outcomesat the forefront of our work.

Our People

Our success rests with our people. They are the frontline, both individually and asteams, serving our customers, building our technology, making strategic decisions,managing risks and driving innovation. We are extremely proud of the diverse andinclusive environment we have built at Revolut, with employees from almost 100
nationalities working together. Our thriving inclusive guilds programme remained
steadfast in its commitment to diversity and inclusion. Our initial five guilds, dedicatedto Women, Pride, Parents and Carers, REACH (Race, Ethnicity and Cultural Heritage),
and Wellbeing, continued to thrive. Building upon this success, we introduced two
additional guilds, with a specific focus on disability, and religion and belief.

Revolut Annual Report 2022

Chair's Statement

These guilds serve as a crucial platform for our colleagues, fostering connection,
collaboration, and the advancement of positive change initiatives. Our dedication toadvancing diversity and inclusion across our organisation remains unwavering, andwe eagerly anticipate the continuation of this important work.

In spite of the challenging macroeconomic and geopoliticallandscape, 2022 was an excellent year for Revolut.
We generated record revenue, earning £923 million, which
represents a 45% increase year-over-year, validating ourdiversified and robust revenue model. We grew, adding over
9.8 million customers, the highest yearly increase in our
history. In 2022 customers used our products more than everbefore, with a 71% increase in deposits and a 55% increasein customers on paid subscription plans. We are proud of thefinancial strength of Revolut, with capital and liquidity well inexcess of our regulatory requirements.

Martin Gilbert

2022 Highlights

6

A huge thanks to all the Revoluters for championing our values, and for their relentless
focus on making Revolut a truly global financial product that helps customers simplify
all things money.

Outlook

Our path ahead is never certain, and there will be plenty of challenges along the way,
but as we continue through 2023 and into 2024, I am excited and determined to build
on our solid foundations and deliver for our stakeholders. We have a huge opportunity
in front of us to become a primary financial services provider for customers globally,
and our ambition, adaptability and innovation equips us for success in reaching
this goal.

Martin Gilbert
Chair
19 December 2023

Revolut Annual Report 2022

7

Strategic Report

2022 Highlights

Chair's Statement

Chief Executive Officer’s Review

Chief Financial Officer’s Review

Strategic Report

2022 Highlights

Chief Executive
Officer’s Review
Revolut exists to make managing, spending, saving, investing
and borrowing money cheaper, simpler and more transparent.
Traditional banking across the world is antiquated, expensive
and falls short of customer expectations. We are committed
to giving people the financial services they deserve, and our
mission is to simplify all things money. Looking back at 2022,
I’m proud that we’ve made huge progress towards achievingthat mission.

Nik Storonsky

Customer Growthand Engagement

Product Innovation

As always, I thank our Dream Team, our colleagues here at
Revolut, who drive unceasingly towards our mounting goals
and ambitions. The strength of our position today is the resultof their work, and they continue to meet the challenges andopportunities brought by our skyward trajectory. I thank themfor their contribution.

As we deepen our presence in each market, we are building the foundation to become
the primary financial services provider for our customers. We have launched Revolut
Bank in 30 countries in the EEA, meaning that we are now a bank for the majorityof our customers. We offer Deposit Protection insurance in Europe up to €100,000,
giving customers peace of mind that their deposits are safe. We have now rolled out
local branches for retail customers in France, Ireland and Spain, giving customers local
IBANs and allowing them to bank like a local with Revolut.

With growing concerns about the rising cost of living, we have improved our money
health tools to help customers better understand their financial situation and build
good habits to save more and spend better. Our product portfolio includes various
money health-related products, including Savings and Spare Change, with Money
Market Funds also launched in 2023. In 2022, 4.3 million customers saved with
Pockets, up 56% from the previous year, and over 2.6 million customers saved a totalof £550 million rounded up through Spare Change.

Over the past year, our retail customer base has grown by more than 9.8 million - morethan in any year in our history. In just seven short years since we first set out, we've had
the privilege of becoming a leading financial services provider across the UK and Europe.
In 2023 so far, Revolut is the most downloaded app in the Finance category in ninecountries and in the top three in 15 countries in Europe. What makes this achievement
even more valuable is the trust our customers have placed in us to help them manage andgrow their finances.

We are constantly enhancing our features and capabilities to better support andprotect our customers. Our team of fraud experts and data scientists take a data-driven
approach to fraud management, deploying a sophisticated fraud detection platform toprotect Revolut customers from falling victim to fraud and scams. We estimate that in
2022 we prevented over £200 million in fraud against our customers.
It was another great year for Revolut Business, which celebrated five years of operationsin 2022. Hundreds of thousands of businesses across the UK, Europe and the US
rely on Revolut Business to manage payments, sales, FX and employee spending.
Monthly active businesses grew 49% year-over-year and business revenue growth
accelerated, exceeding 83%. In 2022, we hit £100 billion in total processed business
transactions. While in the past most of our customers were single-person businessesor micro-enterprises, we have been building our product to serve larger and more
complex companies. Our typical Business customer now has 5-50 employees, whilesome have thousands.

Our scale and the strong growth of our customer base puts even more emphasis on
the quality of service that we provide to customers. Delivering a great experience andproviding good outcomes to our customers remains our top priority, and we are working
hard to make sure our customers can always rely on us. In 2022, we invested heavily in ourcustomer support team by doubling the headcount and providing deeper knowledge andassistance across 14 specialisations. As a result, 90% of tickets in our in-app Chat Support
were picked up by our support agents in two minutes across business and retail in 2022.
Customers appreciated this effort by giving a 'WOW' rating to even more of their support
interactions, from 30% in 2021, up to 60% in 2022.
8

Chief Financial Officer’s Review

Revolut also aims to be the first-choice provider for our customers when their credit
needs arise, by offering a best-in-class product experience and competitive pricing.
We are now offering credit (Unsecured Personal Loans, Credit Cards and Pay Later) innine countries, with revenue from credit products growing more than 10 times yearover-year. Our credit portfolio continues to grow as we expand both the countries inwhich we offer credit and the products we offer in those markets.

Our relentless focus on the customer and on building great products is a major driver ofour growth. Four in five customers who joined Revolut in 2022 joined organically or werereferred by someone they knew. On average, our customers know 87 people who also use
Revolut. Building on that, and to make our customers’ experience even more seamless,we launched Revolut Chat, a secure messaging feature within the app in Q4 of 2022.
To supplement our organic growth, we deployed a £100+ million marketing budget acrossvarious channels and markets where we operate, and we also launched our first-everbrand marketing campaign in the UK.

Revolut Annual Report 2022

Chief Executive Officer’s Review

Our customers are highly engaged and are increasingly trusting Revolut for theireveryday financial needs. Over the course of the year, our transaction volume grew bymore than 70%, with more customers using Revolut for their daily spend. Our customers
also rely on Revolut for more of their financial needs, with many using multiple Revolut
products. In 2022, increased customer activity contributed to a 71% increase in customer
balances. We also saw encouraging adoption of our paid subscription products,
with 55% growth in retail customers using a paid plan in 2022. Our monthly active
customers increased by nearly 50% in 2022, a reflection of the strength of our products.

2022 was another great year in terms of financial performance,
customer growth, new product launches, expansion into newmarkets, and for the continued strengthening of our risk,
compliance and governance infrastructure.

Chief Executive Officer & Co-founder

Chair's Statement

To appropriately serve our customers we have expanded our product areas
considerably. For example, when making payments, businesses can now send money
via many payment routes, schedule and track payments, make payments through ourAPI, add expense details and control spend through our spend management software.
Business users can also accept payments via invoices, payment links, QR codes, local
account details and our API.
Revolut Annual Report 2022

9Strategic Report

2022 Highlights

Chair's Statement

Chief Executive Officer’s Review

Chief Financial Officer’s Review

Strategic Report

In 2022, we launched Revolut Reader, our first-ever hardware device for in-person
payments. With Revolut Reader, payments are processed seemingly instantly andfunds appear in the customer's account within 24 hours of a transaction. For online
payments we rolled out Revolut Pay, a one-click payment feature for merchants. In amatter of seconds, existing Revolut users can securely pay online with just one click.
And with Revolut Pro, our income, payment and expense management account forfreelancers within our retail app, self-employed people and contractors can now easily
manage their business funds.
We believe that financial services across the world are in need of an overhaul, and ourambition has always been to take our products global. As part of our global expansion,in 2022, we laid the foundations for our launches in Brazil and New Zealand in May andJuly 2023, respectively. We also launched Revolut Business in Australia in May 2023.

Financial Performance

Dream Team

Proudly added over
3,000 Revoluters to
our Dream Team2022 Highlights

Chair's Statement

Chief Executive Officer’s Review

Chief Financial Officer’s Review

Commitment to
the Community

In addition to focussing on our customers, we strive to create a positive impact within
our wider communities too. In March 2022, we launched a free payments service
for Ukrainian refugees. More than 250,000 refugees used the service to gain quick
and easy access to their money. Thanks to the generosity of our customers, and in
partnership with the British Red Cross, we were also able to raise £9 million for the
British Red Cross’s Ukraine Crisis Appeal.

Looking Ahead

Looking ahead, our focus is on continued growth across all our markets. We remaincommitted to our ongoing UK banking licence application in addition to bringing
the Revolut app to new markets and customers around the world. We will continuebuilding a global financial services platform, one which feels personal to everyone andwhich is increasingly becoming a primary choice to simplify all things money. In 2023,
we surpassed 35 million retail customers. We aim to '10x' this in the future, pushingtowards 350 million and beyond.

2022 was a year of exceptional financial performance. We grew our revenue from £638
million in 2021 to £923 million in 2022, a significant increase of 45%. We saw robust
growth across our different business units, proving the strength of our diversified
business model. This was driven by our rapid roll-out of products and many millionsof new customers. You can read more about our financial performance in the Chief
Financial Officer's Review in the next section.

Nikolay (Nik) Storonsky
Chief Executive Officer & Co-founder
19 December 2023

All of these successes would have been impossible without our Dream Team, ourRevoluters who together drive the company forward. Attracting, retaining andnurturing talented people while fostering an inclusive and diverse work environmentis of paramount importance to us.

In a year when many companies scaled down headcount or
reduced their hiring, we proudly added over 3,000 Revoluters
to our Dream Team and continued investing in making Revolutan even better place to work.
We improved our employee engagement: introducing newvalue-based behaviours (a clear and transparent set ofvalues enabling a consistent understanding of our culture
across the company), enhancing our employee feedback
tool, and launching a new team called CultureLab to create
an immersive corporate culture and improve our employee
experience.
These initiatives were also recognised externally, with Revolut
receiving a 'LinkedIn Top Startup' award in the UK for the fifth
consecutive year in 2022.

Revolut Annual Report 2022

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Revolut Annual Report 2022

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Strategic Report

2022 Highlights

Chair's Statement

Chief Executive Officer’s Review

Strategic Report

Chief Financial Officer’s Review

Chief Financial
Officer’s Review

2022 Highlights

Doubled Down on
Investing in Revolut's
Future Growth

Throughout 2022, our financial results mirrored our everstronger product-market fit across both consumer andbusiness segments, as well as the robustness of our businessmodel. Our customer growth accelerated, with more than
9.8 million customers opening Revolut accounts - more thanin any other year in our history. Deposits grew 71% year-overyear as customers trusted Revolut with more of their funds
and transitioned from occasional to day-to-day users.

Chief Financial Officer’s Review

Amid a market environment dominated by uncertainty and hesitancy, we continued
to see large, attractive opportunities to invest in the future growth of Revolut.
We directed our excess gross profits after operating expenses towards investments
in sales and marketing, new products and global expansion and improving customer
experience.

New Products and Global Expansion: In 2022, we continued to make long-term bets
on building and launching new products as well as expanding our geographic reachbeyond our core markets to become the first truly global consumer fintech. We have
deployed over £65 million into these initiatives with the new product and expansion
teams reaching more than 700 employees by the end of 2022.

Victor Stinga

Customer Experience: Building customer trust is one of the key priorities for us as afinancial institution and this starts with the level of customer support we are able toprovide to customers when they need us. We invested heavily in scaling our customer
operations functions, spanning both customer support and financial crime operations,as well as optimising our data models and in-app journeys, while further automating
many processes. As a result, we have recorded that:

Chief Financial Officer (Interim)

We continued to prove the strength of our diversified revenue model. While 2021 hadbeen a year when our Wealth unit benefited from exceptional tailwinds, which were
driven by a surge of retail investing activity in crypto and equity markets, we saw thisactivity drop significantly in 2022 in line with general market sentiment. Despite thesetrends, we continued to significantly scale our revenues to £923 million driven by
growth of 106% year-over-year across all our other business units which contributed£836 million in 2022 (up from £406 million in 2021). Notably, interest income on ourassets contributed £83 million to revenue in 2022, driven by increased deposits,
interest rate hikes and the build-out of treasury capabilities.

Chief Executive Officer’s Review

Sales and Marketing: In 2022, we supplemented our organic growth with sustained
sales and marketing investments. We deployed a £100+ million marketing budget
across markets to boost peer-to-peer referrals, increase our presence on digitalchannels as well as to launch our first-ever brand marketing campaign in the UK.
We also decided to pursue larger opportunities in the enterprise segment of
the business banking market by scaling our Revolut Business sales team to morethan 700 representatives and onboarding our largest client to date with more than
60,000 employees. We closely monitor the performance of our Marketing and Sales
investments against strict Return On Investment (ROI) constraints at country andchannel level.

2022 was another strong financial year for Revolut - weachieved accelerated customer growth, as well as significant
increases in revenues and gross profits. We executed ourstrategy and investments with precision, and were fortunate
to have navigated a difficult year for the industry, avoiding any
redundancy programmes and continuing to hire actively.

Accelerated Growththrough Revenue
Diversification

Chair's Statement1.
2.

90% of customer service queries in 2022 were picked up by our support team in
two minutes.
The percentage of customers who rate their experience with our customer
support team as 'WOW' increased from 30% in 2021 to 60% in 2022.

Investing in Growth
£750M

£642M

Administrative Expenses£404M

Customer Operations
Sales & Marketing

Revenue Composition£500M

New Products &Global Expansion
£0M

£250M

£500M

£750M

Customer Experience£215M£1000M£250M

Payments
Subscriptions

FY21

£638M

£23M

FX
£0M

Interest Income
Other Income

FY22

Gross Profit£923M

Operating
Costs

Investments

Adjusted
EBITDA1

Wealth1
Adjusted EBITDA refers to Earnings before Interest, Tax, Depreciation, Amortisation and Share-based Payments, a measureof core profitability

Revolut Annual Report 2022

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Revolut Annual Report 2022

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Strategic Report

2022 Highlights

Chair's Statement

Chief Executive Officer’s Review

Strategic Report

Chief Financial Officer’s Review

Overall, 2022’s financial results demonstrate our commitment to building asustainable business that balances fast growth and profitability. Throughout the year,
we continued to build momentum - ramping up quarterly revenue at ~20% quarterover-quarter and displaying discipline in optimising our gross profit margin to surpass>75% in Q4. We continue to focus on gross profit margin as a primary KPI for thecompany as it demonstrates the strength of our business model and its operating
leverage. Improvements in gross profit margin followed a setback in Q1 caused by acard payment fraud incident in the US that led to a loss of £17 million to Revolut but
not to our customers. While being an isolated incident that was remediated withindays of it being identified, it served as a powerful reminder of the risks inherent in thebusiness we operate, and of the need to continually refine our controls to remain one
step ahead of such actions.

Balancing Fast
Growth andProfitability

2022 Highlights

Prudent Balance
Sheet Management

Focussed on
Strengthening Our
Financial Processes
and Controls

Quarterly Profitability

£296M

£164M

70%

68%

£236M

£177M

53%

Chief Financial Officer’s Review

In line with the overall business, our balance sheet continued to grow considerably- reaching a total of £14 billion in total assets by December 2022. This was primarily
driven by a growth of 71% in customer funds - a reflection of increased customer
activity, such as transitioning to primary account usage and trust in our platform.
We continued to exercise conservative management of our balance sheet, choosing
to keep over 87% of our assets in cash with Central Banks and reputable financial
institutions and in high-quality liquid assets. We enhanced our treasury capabilities
to ensure we are well positioned to manage our balance sheet and associated risks
effectively while also achieving positive yield on our assets.

We continued to focus on making improvements to our financial systems, processes
and controls. In the previous annual financial audit, we were issued a qualified opinion
due to deficiencies identified in our IT control environment. We have since remediatedthese gaps and have worked with BDO, our auditor, to conduct extensive testingof both the design and effectiveness of our controls. While these historical events
have had a knock-on impact on the timing of publication of these financial statements,
we are now back in a position to return to a regular reporting schedule starting fromnext cycle.
We are grateful not only to our colleagues in the Finance department but throughout
the organisation for their contribution to building a culture of financial control anddiscipline, as well as to our entire Executive team and the Board for championing these
initiatives. We have confidence that our commitment to this remediation process sets
the foundations for building a robust finance function that can support the businessin the long-term to achieve our mission of building innovative financial products that
simplify all things money.

80%

£252M
£210M

Chief Executive Officer’s Review

Throughout 2022, we continued to maintain levels of capital and liquidity resources
comfortably in excess of regulatory requirements across all entities. Looking forward,
we forecast to generate high levels of organic capital and liquidity. This puts us in
the fortunate position of not having to depend on external sources of funding to
execute our strategy at a time when the availability of capital in the industry has
substantially decreased.

This trajectory of revenue growth and operating leverage puts us in a position ofsustainable profitability on an Adjusted EBITDA basis in the second half of 2022.
Recording profitability in our UK entities in 2022, as well as sustaining profitability
going forward, allowed us to recognise a deferred tax asset on carryforward losses
and share-based compensation for the first time in 2022.
We observe this momentum continuing in the first quarters of 2023, putting us on
track to double the scale of our business and record substantial profits by the end of
the 2023 financial period.

Chair's Statement

£143M

£87M
£43M
£-20M

Q1-22

Q2-22

Revenue

£0.5M

£-1M

Gross Profit

Q3-22

Adjusted EBITDA1

Victor Stinga
Chief Financial Officer (Interim)
Q4-22

19 December 2023

Gross Profit Margin

1
Adjusted EBITDA refers to Earnings before Interest, Tax, Depreciation, Amortisation and Share-based Payments, a measureof core profitability

Revolut Annual Report 2022

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Revolut Annual Report 2022

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Strategic Report

General Overview

Who We Are

Our Values

Our History and Progress

Our Products and Services

Strategic Report

General Overview

General Overview

Who We Are

Our Values

Our History and Progress

Our Products and Services

Our Values

Revolut’s unique culture is built on five core values. By working to these values every
day, we create a fertile environment for success. Our values define ‘the Revolut way’,
and we put them into practice every day across our organisation. They keep us on theright path, motivate us and ensure we hire and retain the best people. Our values are:Never Settle

We constantly push, rethink, and rework to get 10x further from where we are now.
We aren’t afraid to be ambitious — and we’re always looking for the next big thing.

Revolut continues in our mission of simplifying all things money, offering people andbusinesses greater control over their finances and providing data-driven insights fora customised user experience.

Who We Are

Established in the UK in 2015, Revolut began with transfer and foreign exchange
services that were faster and cheaper than those of legacy banks. Ever since, wehave maintained a relentless focus on answering customers’ needs and giving thema best-in-class experience. As of October 2023, we have more than 35 million retailcustomers in over 38 countries around the world using Revolut and our growing suiteof products to better manage their finances.

Shoot for the Moon
⚫ Relentlessly push to become number one in the world. Look for ways to disrupt, scale, reinvent.

OUR DREAM TEAMGROWTH⚫ Come up with ideas that are new, better and unique. Be creative — reiterate, simplify, move beyond the traditional way.
Connect the dots from different areas, industries, and products.

↑ +112%⚫ Vigorously set ambitious, bold, and rational goals to guide your way.

2022

5,913
Push the Envelope

2021

2,795

⚫ Constantly change your lens. Challenge solutions from all angles to deliver the best. Run toward critique to advance iteven further.
⚫ Recognise and celebrate those who challenge the status quo for the better.
⚫ Pull at every thread. Don’t just meet the ask, go above and beyond when solving a problem and never leave loose ends.

Jump in With Both Feet
⚫ Enjoy the challenge, celebrate achievements, and have fun.
⚫ Show initiative, inspire others. Enjoy taking on stretch assignments even if they’re outside of your core responsibilities.
⚫ Share optimism and confidence. Remain positive and energised when facing adversity.

Revolut Annual Report 2022

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Revolut Annual Report 2022

17

Strategic Report

General Overview

Who We Are

Dream TeamOur Values

Our History and Progress

Our Products and Services

Strategic Report

We believe the key to winning is building diverse, lean teams of brilliant go-getters
who break down barriers.

General Overview

Who We Are

Our Values

Our History and Progress

Our Products and Services

Never Lose ‘North’⚫ Always think beyond the task at hand, keep the bigger picture in mind. Think several steps ahead. (e.g. Will our solution
create more problems? What will the next problem be once we solve this one?). Look for ways to create scalable
frameworks and tools to increase the impact.

Never Compromise on Talent⚫ Make hiring decisions thoughtfully. Take the time to find the perfect fit. The quality and diversity of our talent defines our
successes.
⚫ Provide mentoring, coaching, opportunities, and support to help your team thrive. Award the best.

⚫ Avoid ‘analysis paralysis’ so that we move toward solutions.
⚫ Focus on the outcome and continue checking your compass along the way (i.e. Are we still going in the right direction?).
If not, take courage to start from scratch.

⚫ Act on underperformance promptly. Monitor it, sort it and remedy it.

Be Open Minded – Listen, Probe, Adjust
Ship, Shipmates, Self

⚫ Invite criticism and alternative views to tackle problems better. Constantly challenge assumptions in your thinking.
Do not follow any previously agreed-upon approach blindly.

⚫ Work together — it’s the only way the company can move forward. Forge a shared vision.
⚫ Support each other individually and professionally, across teams and departments. Even if it’s not in your KPIs or goals.

⚫ Take turns speaking and listening. Consider all feedback regardless of the person's title. There is no place forpolitics in Revolut.

⚫ Be inclusive, approachable and interested in your colleagues’ work, especially if they need your help or expertise.

⚫ Think through your recommendation, don’t say 'yes' or 'no' too quickly.

Be Radically Honest, Direct, and Respectful⚫ Feedback should be necessary, clear, direct and professional. Always say what needs to be said. Build on the feedback
you receive.
⚫ Step up, speak up, encourage other Revoluters to do the same.
⚫ Be respectful at all times. Find the best tone of voice, time, and situation to provide feedback.

Lead By Doing⚫ Roll up your sleeves and get into the weeds of the work. Get to know the nitty-gritty, ins-and-outs of your team to help
guide everyone to success.
⚫ Enable others to achieve their goals — celebrate when they’ve done well and give credit where credit is due.
⚫ Accept responsibility when things go wrong. Work quickly to make things right.

Think Deeper

We believe logic, reason, and common sense prevail over everything else in decisionmaking. We dive deep until we get to atoms. If we don't know something – we bet,collect the data and reiterate.

Start With “WHY?”⚫ Think before executing — articulate your problem, probe into it. Is it a real problem? Challenge others to do thesame. Seek data to support decision-making, if data is not available, be transparent that you’re making an instinctual
recommendation.
⚫ Dive deep into the root cause. Solve from the first principles. Question experience, data and assumptions. Always ask:
'Is that true?' and 'why?'.
⚫ Constantly challenge your analysis, sense check, look from every angle and be prepared to revisit the proposed solution
or initial problem.

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Strategic Report

General Overview

Get it Done

Who We Are

Our Values

Our History and Progress

Our Products and Services

Strategic Report

We believe that ideas are great, but execution is everything. That’s why respect at
Revolut comes from sweat and stretch.

General Overview

Who We Are

Our Values

Our History and Progress

Our Products and Services

Our History and Progress

Act Like an Owner⚫ Own your work and the tasks required end-to-end. Look for answers and solutions, not excuses.
⚫ Assume full responsibility and accountability beyond your role or over expectations. Don’t wait for guidance, self-direct.
⚫ It is never 'someone else’s job or problem'.

2015
Revolut founded in the UK⚫ Bring a can-do attitude at all times. Keep calm when facing challenging work.

2016⚫ Unblock roadblocks. Break walls. Persevere until the project is finished. Completion is a must. And then iterate.

Reached 300,000 retail customers

Commit and Execute⚫ Deliver on commitments, instil trust in your go-getter attitude.

Deliver Wow$15 million Series A fundraising

We believe that everything we do should solve our customers’ needs. To create awe
and inspire, we pay attention to every single detail.

2017
Launched Revolut Business

Put Customer First

Launched Crypto Trading across EEA⚫ Put yourself in the shoes of the customer (external or internal) and understand how they are using the product orprocess, be curious.

Launched Revolut Premium⚫ Focus on, and think through every single detail.

$66 million Series B fundraising⚫ Don’t ship anything unless it’s ready, fully-baked, tested and reviewed.

2018
First Banking licence granted by
Bank of Lithuania

Keep it Simple⚫ Simplify everything – minimise any friction for the customer. Save time for your customers, your manager and yourstakeholders.
⚫ Make decisions on what to build and what to kill.
⚫ Use language everyone can easily understand. Extract the essence. Lead with the most important information.
Bottom line up front.

Launched Revolut Metal

2019$250 million Series C fundraisingFirst expansion to Australia and Singapore
Launched Trading - offering millions ofcustomers access to fractional shares
Launched Donations - partnering withinternational charities to support
global causes

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Strategic Report

2020

Our Products
and Services

Launched Revolut Insurance
Launched in US and Japan

General Overview

Who We Are

Our Values

2021
Launched banking across 18 EEA countries

Over £100 billion
transactions processed with
Revolut Business globally

Launched Merchant Acquiring for Revolut
Business customers

Our Products and Services

Revolut was founded in 2015 in the UK, offering faster and cheaper transfers andforeign exchange services than legacy banks. Eight years later, millions of customers
around the world use Revolut to manage their finances across an ever-growing suiteof simple-to-use, yet sophisticated products.

Launched Open Banking in UK and EEA
Launched Revolut banking services in
Lithuania and Poland

Our History and Progress

Revolut is a digital, app-based financial service. Territorydependent, we offer retail customers e-money or bankaccounts, which they use for their daily spending and financial
management. With four subscription plans (the fourth, Ultra,
having launched in 2023), on top of our free Standard plan,customers can choose the option which best suits theirfinancial lifestyle. Our retail services include:$580 million Series D fundraising⚫ Instant peer-to-peer payments

Launched Stays, a travel andaccommodation booking feature⚫ Low-cost foreign exchange and multi-currency cards⚫ Junior (<18) accounts

Launched On-Demand Pay early salary
withdrawals
Launched first out-of-app services withWeb App and Google Chrome ‘Shopper’
extension$800 million Series E funding⚫ Buying and selling shares in listed companies andcryptocurrencies⚫ Deposit protected savings⚫ Insurance intermediation services

2022⚫ Rewards when shopping with Revolut’s partners⚫ Cashback when booking travel accommodation⚫ Consumer lending services in eligible countries, including
unsecured Personal Loans, Credit Cards, and BNPL (BuyNow Pay Later)

Reached 26 million retail customers
Revolut Business reached £100 billion in
total processed transactions

Launched in 2017, Revolut Business provides similar electronicmoney and payments services, multi-currency exchange,
merchant acquiring, international and domestic banktransfers for small and medium enterprises, with the speed
and ease they have come to know and love from our retailproduct. As the retail and business ecosystems grow, we
continue to add value at the touchpoints between the two.
We offer Revolut Pay and Revolut Reader to merchants tofacilitate online and in-person payments for retail customers,
as well as offer rewards and discounts. We also launched
Revolut Pro, an income, payment and expense management
solution within our retail app that enables self-employedpeople and contractors to manage their business fundswith ease.

Deposit Protection insurance for EEA Bank
customers in 30 countries
Local IBANs launched in France (as ofAugust 2023 also live in Spain and Ireland)
Launched Revolut Chat - instant customer
to customer messaging feature
Launched Personal Loans in Ireland,
Romania, and the US
Launched Pay Later instalments in Irelandand Poland
Launched Revolut Reader - Revolut
Business’s first hardware device forin-person payments
Launched Revolut Pay - online merchantcheckout feature with one-click payment

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Strategic Report

Business Performance

Customers

Customer Protection

Product Improvements

Global Expansion

Strategic Report

Business
Performance
Customers

Total Retail Customers↑ +60%
2022

26.2M

Customer Protection

2021

Customers

Customer Protection

Product Improvements

Global Expansion

Over USD $55 billion was lost to scams worldwide in 2021, according to a study doneby the non-profit organisation Global Anti-Scam Alliance (GASA) and data service
provider ScamAdviser.
At Revolut, our fraud teams work tirelessly to prevent our customers from falling victim
to scams and fraud, many of which are perpetrated by increasingly organised andglobal criminal actors. In 2022, we continued to invest in strengthening our set ofadvanced, data-science based tools and techniques to prevent, detect and disrupt
fraudulent activity. In particular:

Revolut’s performance in 2022 defied the global fintech
downturn, enjoying our strongest ever year of sustained
growth, both in customer numbers, which grew by 9.8 million
from 16.4 million to over 26.2 million, and monthly transactions,which jumped from 199 million to 341 million by the end of theyear. Revolut Business grew by more than 90,000 businesscustomers.

⚫ Our in-house, proprietary fraud detection system uses advanced machinelearning and artificial intelligence techniques to analyse up to 341 million customertransactions every month for signs of fraud. Our fraud detection and intervention
approach enabled us to stop more than 90% of APP (Authorised Push Payment)
scam attempts. Our system learns quickly from newly identified fraud trends andmodus operandi, ensuring our customers are protected from new types of attacks.

This record growth was achieved in a sustainable manner,with 78% of growth among European retail customers comingfrom word of mouth or organically. The total number of users
on paid plans grew by 55%, while transaction volume grewby 71%. These numbers demonstrate how our customers
continued to explore and use the full range of products andservices offered to Plus, Premium and Metal account holders.
Our fourth subscription plan, Ultra, launched in 2023.

⚫ We significantly matured our customer-facing scam warnings and interventions
with the goal of better 'breaking the spell' of fraud and helping our customers
to think twice before making a high-risk payment. In 2022, we introduced new,targeted and tailored in-app warnings as well as scam intervention advice
delivered via our expert team of fraud prevention chat agents. These interventionsalign to the industry message of 'Stop, Challenge, Protect' and bring proportionate
and targeted controls into the payment journey.

This growth was also supported by the successful scale-upof growth and marketing activities, including the accelerationof performance marketing, customer referrals, influencers
and the launch of Revolut’s first ever 'Above The Line' brandmarketing campaign.

16.4M

Business Performance⚫ Our scam awareness education programme continued in 2022 with blog posts,
emails and push notifications to educate and warn customers about emerging
fraud and scam trends.
We estimate that in 2022, we prevented over £200 million in fraud against ourcustomers. Future improvements will focus on providing our customers with additional
security-driven features to help keep their accounts and money even safer. In 2023,
we are already taking scam education to the next level by launching scam awarenesscampaigns with our in-app Learn programme to arm our users with everything theyneed to stay one step ahead of the bad actors.

In line with our customer growth, we are also committed
to delivering the best possible customer outcomes while
minimising waiting times. Milestones we proudly achieved in
2022 include:⚫ Increasing our highly specialised customer support teamfrom nearly 1,200 at the beginning of 2022 to nearly 3,000
at the end of the year (including both employees andoutsourced resources).

Number of Monthly Transactions↑ +71%⚫ Providing deeper knowledge and assistance across 14
specialisations while doubling our customer satisfaction
scores.
⚫ Reducing customer waiting time to 2 minutes for 90% ofinteractions with our support agents.
⚫ Industry recognition for our incredible customer support
with a Gold prize at the International Customer ExperienceAwards 2022 (iCXA).

2022

341M
2021

199M
Revolut Annual Report 2022

At the start of the year, we strengthened our Customer
Experience Managers team, who work to improve customer
experience by actively listening to user feedback across all
support and social media channels, and actioning accordingly.

24

Revolut Annual Report 2022

25

Strategic Report

Business Performance

Product Improvements

Customers

Customer Protection

Product Improvements

Global Expansion

Strategic Report

Business Performance

Our fast pace of new customer-centric product and feature launches continued
through 2022, as we further expanded our services to meet the growing needs of ourcustomers. We launched Revolut Bank in 30 EEA countries, meaning that we are now
a bank for the majority of our customers. Revolut offers Deposit Protection insurancein Europe up to €100,000 giving customers peace of mind that their deposits are safe.

Product Improvements

Global Expansion

Revolut Reader: We launched our first hardware device to help merchants accept inperson payments anywhere. Revolut Reader accepts instant transactions made with
debit and credit cards, as well as contactless payment methods. The tool is designed
to run transactions 24/7 and process payments in a matter of seconds, enablingcustomers to accept, settle and store funds all in one place, under either their Revolut
Business or Revolut Pro account. Revolut Reader can be adapted to other POS (Pointof Sale) systems in place within businesses, having a SDK/ API solution included.
Revolut Pay: Revolut debuted a new feature that allows merchants to securely accept
online payments from consumers with just a click, in a matter of seconds. Existing
Revolut users can use Revolut Pay and make payments directly through their Revolut
account balance or their preferred card. Non-Revolut customers can also use Revolut
Pay to make payments by using saved Mastercard or Visa cards issued by otherproviders. They will then be prompted to join the Revolut ecosystem by receiving acash reward for signing up to a Revolut retail account, allowing them to pay evenfaster the next time they check out.

We also launched multiple products and features for both retail and businesscustomers:

RetailRevolut Chat: We launched an instant messaging feature, where Revolut customers
in the UK and EEA can chat as well as share GIFs and stickers whilst sending andrequesting funds to and from other customers. Designed with a focus on security,
all chat messages have end-to-end encryption. Customers are able to opt out of thechat function should they not want to use it, and they can either enable or disable itcompletely in the ‘Security & Privacy’ section. Additionally, users can block other users
if necessary.

Personal Loans: Our unsecured personal loans offering was expanded to multiple EEA
countries. The credit contract is signed with a qualified electronic signature and thefunds are disbursed instantly into the customer account. Customers will be able tochange their monthly repayment date, make partial or full repayments directly fromthe app and check their credit statement at any point in time.

Customer Protection

Business

In 2022, we also rolled out local IBANs in France. In the past, our users in France
experienced IBAN discrimination by service providers because of their foreign accountdetails, even though it is illegal to refuse European account details. Through French
IBANs we now enable local customers to seamlessly use their Revolut account forsalary deposits, direct debits payments with any kind of service providers and have atruly seamless banking product in France.

Revolut <18: The launch of the rebranding of Revolut Junior, a special account forchildren aged 6 - 17, Revolut <18 helps give kids hands-on experience so they can get
off to a good start with their finances. They can earn their allowance, build a budget
and save, and with <18’s end-to-end security, spending alerts, custom limits and inapp card controls, they're in safe hands. They can also unleash their creativity bydesigning their own personalised Revolut <18 card.

Customers

Revolut Pro: A dedicated income, payment and expense management accountwithin the Revolut retail app, Revolut Pro caters to the growing number of freelancers,
sole traders and self-employed individuals looking to more easily, efficiently andconveniently manage business funds. Revolut Pro is a free account with no monthly
fees, and no deposit or balance requirements. The account can be created in under
two minutes within Revolut’s app, and it offers a debit card with cashback. It alsoenables users to quickly accept payments via a variety of payment means (including
Revolut Reader) and securely send transfers or instant payments to other banks
as well as other Revolut accounts. With Revolut Pro, customers can manage theirbusiness funds without needing a fully-fledged business account.

Global Expansion

Our mission is to simplify all things money across the globe. We continued to pursue
our global expansion in 2022 across a number of different markets:

North America

Continued growth across
new and key markets

Pay Later: Revolut launched its first pay later product that uses an approved credit limit,
designed to focus on affordability. Revolut puts the customer in control of when theywant to use Pay Later, rather than restricting them to certain merchant partnerships.
The product also features built-in safeguards to check that users can afford their
Pay Later limit. Revolut is able to offer a robust assessment as it approves the credit
limit before the transaction rather than offering an instalment payment method at the
point of sale.

The United States remains a strategic market for Revolut and,during 2022, we focused on both improving our core productset, as well as developing new products to boost our evergrowing customer base.
Asia-PacificOur operations in Asia-Pacific in 2022 continued to expand,
and the region remains a high-growth, high-potential region for
Revolut’s global expansion. We operate in Australia, Singapore
and Japan. We also launched in New Zealand in July 2023.

Crypto Learn: We introduced interactive lessons with quizzes to test customers'
knowledge and understanding of different cryptocurrencies. Upon completion, users
may receive a small amount of the target cryptocurrency as a reward.

Latin America
We laid strong foundations for our Latin American expansion
in 2022 with a focus on Brazil and México (the former
launching in May 2023).

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Strategic Report

Our Business Model & Strategy

Strategic Report

Our Business Modeland Strategy
At Revolut, our mission is to simplify all things money.
We want to make managing, spending, saving, investing andborrowing money cheaper, simpler and more transparent.
We deliver on this mission by designing best-in-classproducts to meet the global financial needs of our customers.
Equally importantly, we invest heavily in building customer
trust by ensuring the security and reliability of our platform,
and are disciplined in chasing profitable growth.
Best-in-class Products
Revolut offers a wide range of products for both retail andbusiness customers. Retail customers can hold, send andreceive, and spend money in different currencies withour competitive multi-currency accounts, cards, and P2P,
domestic, and international transfers. Revolut customers canalso save, invest, and borrow money all in the same, single
integrated Revolut App. In 2022, we further enhanced our
product suite, with key launches including Revolut Chat,
Personal Loans, Pay Later and Crypto Learn.
We also offer an all-in-one platform for our Revolut Businesscustomers, including multi-currency accounts, company
cards, business payments, transfers, and many more. In 2022,
we launched new products such as Revolut Reader, Revolut
Pay and Revolut Pro to support a broader range of use casesand customer profiles with our Revolut Business suite.

Non-financial Information Statement

Non-financial
Information Statement
We also ensure that our customer funds are safe with us.
We offer Deposit Protection insurance for customers ofRevolut Bank UAB (EEA customers) and strictly ensure funds
safeguarding as an e-money institution (EMI) for customers
of Revolut Ltd (UK and Swiss customers).

The table below cross references Non-financial Information and Key Performance Indicators provided in this report. This section
is prepared to comply with Sections 414CA and 414CB of the Companies Act 2006.

Reporting Requirements

Policies and Standards which
Govern Revolut’s Approach

References

To ensure we are always sensitive to our customer needs,
at the start of the year we also strengthened our Customer
Experience team to capture customer feedback across all
our support and social media channels. We leverage thiscustomer feedback to meet changing customer needs andresolve any outstanding issues to deliver the best customer
experience possible.

Environmental Matters⚫

⚫

Environmental, Social and Governance(ESG), page 33⚫

Environmental, Social and Governance
PolicyResponsible Lending Policy⚫
⚫
⚫

Global Whistleblowing Policy
Health and Safety Policy
Equal Opportunities Policy⚫

Our People, page 37⚫
⚫
⚫

Anti Harassment and Bullying Policy
Conduct Risk Management Policy
Staff Remuneration and Governance
PolicyPerformance Management Policy
Global Grievance PolicyGroup Fitness and Propriety Policy
Corporate Criminal Offence Policy
Communications Policy
Modern Slavery Policy
Third Party Risk Management Policy
Data Governance Policy
Information Classification and Handling
PolicyGlobal Privacy Notice⚫

Environmental, Social and Governance(ESG), page 33
Our Partners and Suppliers, page 32⚫

Environmental, Social and Governance(ESG), page 33⚫
⚫
⚫

Employee Handbook
Code of Conduct
Environmental, Social and Governance
PolicyVulnerable Customers Policy
Customer Outcomes Policy
Consumer Duty Fair Value Policy

⚫
⚫
⚫
⚫
⚫
⚫

Anti-bribery and Corruption Policy
Anti-money Laundering Policy
Conflict of Interest Policy
Global Sanctions Policy
Market Abuse Policy
Anti-fraud Policy⚫

Our Partners and Suppliers, page 32⚫
⚫

Chief Risk and Compliance Officer’s
Review, page 41
Principal Risks and Uncertainties, page 43

Description of the Business Model⚫

Our Business Model and Strategy, page 28

Non-financial Key Performance Indicators

⚫
⚫
⚫
⚫

Strategic Report, page 3
Chair’s Statement, page 6
Chief Executive Officer’s Review, page 8
Business Performance, page 24

Financial Key Performance Indicators⚫

Chief Financial Officer’s Review, page 12

Employees

Profitable Growth
Revolut continues to see tremendous growth year on year,
both in our deepening presence in the UK/EEA as well as
in our global expansion. We continue to invest in growth,
supplementing our organic growth with sales and marketinginvestments. We ensure disciplined spending and monitor
our return on investment using proprietary models and tools.
Outside of Europe, we are seeing encouraging results in
the US, Australia, Singapore, and Japan. As we continue
to strengthen our global capabilities, we will continue toselectively bring Revolut to more countries around the world
with a highly efficient, repeatable model.

⚫
⚫
⚫
⚫
⚫
Human Rights⚫
Social Matters

Customers love our products, rating us 4.3 out of 5 on
Trustpilot (as of October 2023) and 4 out of 5 joining throughword of mouth. We are encouraged by our customer support
and are excited to continue delivering a wider range of evenbetter products.
Anti-corruption and Anti-bribery

Customer Trust
It is our top priority to ensure that Revolut is a safe and reliable
platform for customers.
Description of Principal Risks and Impact ofBusiness Activity

In 2022, we doubled down on this, investing significantly
in strengthening our teams, products, and technology toprotect customers from falling victim to fraud and scams.
We take a data-driven approach to fraud management,
deploying a sophisticated fraud detection platform to protect
our customers, and we will continue investing in this to ensure
the safety of the platform.

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28

⚫
⚫
⚫
⚫

Revolut Annual Report 2022

⚫
⚫
⚫

⚫

29

Strategic Report

Engaging with Stakeholders

Our Customers

Our Employees

Our Investors

Our Regulators

Our Partners and Suppliers

Strategic Report

Engaging with
Stakeholders

Engaging with Stakeholders

Revolut sets itself apart from its competitors throughits customer-centric approach, which gives our users asuperior experience. From everyday spending to savings andinvestments, Revolut helps people get more from their money.
As of October 2023, Revolut scores an industry-leading
average user review of 4.3/5 on the consumer business
review site Trustpilot.
One of our key company cultural values is Deliver Wow: ourbelief that everything we do should solve our customers’
needs. We break this down into two components: putting
customers first and keeping things simple.
In 2022, we introduced a long-term vision: to simplify all things
money. Our mission is to provide a frictionless experiencefor our customers by taking the traditional borders, barriers,
intermediaries and bureaucracies of finance and rendering
them invisible.

Our Employees

Our Investors

Our Regulators

Our Partners and Suppliers

Our Employees

For more on how we engage and manage our employees as strategic stakeholders,refer to the 'Our People' section (page 37).

Our Investors

Our investors have played a key role in the success of Revolut, as their capital has
allowed us to grow rapidly, as well as giving us the financial robustness to facepotential oncoming economic challenges.

Building and upholding strong relationships with our
stakeholders is pivotal to Revolut’s success as we continue
to expand our global footprint, product suite, customer baseand employee headcount. When making decisions, the Boardis mindful of its responsibilities under s172(1) of the Companies
Act 2006 to promote the long-term success of the company
with regard to our range of stakeholders. In this section, we
set out steps that we have taken as a Group to engage with
our key stakeholders.

Our Customers

Our Customers

We completed our most recent funding round, Series E, in July 2021, when we raised$800 million on a valuation of $33 billion. Such an investment represents a backing
and an affirmation of our goal of simplifying all things money, and it continues toenable Revolut to grow further and develop new products to meet the needs of ourcustomers.
We value the opinions and the trust afforded to us by our investors, and we provide
them with regular updates on our performance.

Our Regulators
In parallel, we place a significant focus on customer educationand industry collaboration, releasing a series of fraud
awareness communications related to current and emerging
fraud threats whilst also developing and reinforcing our links
with industry, law enforcement, regulators, governments andconsumer groups to combat fraud and scams. This includes
engagement with the UK Payment Services Regulator and UK
Finance as well as active campaigning for fraud to be includedin the Online Safety Bill and for Big Tech to be held to accountfor enabling fraud and scams. Our Head of Fraud also sits on
the Advisory Board for Cifas, the UK fraud prevention agency.
Revolut is committed to responsible handling of customer
data, aligning our practices with GDPR and the evolving
global landscape of data protection legislation. We follow the
principles of privacy by design in our product development
cycle and ensure that personal data is processed fairly,
transparently and without bias.

Revolut engages with multiple regulators in different
jurisdictions globally. Our two primary regulators are theUK's Financial Conduct Authority (FCA) and the Bank of
Lithuania (BoL). All of our regulatory engagements adhere
to our principles of cooperation, transparency, accuracy andtimeliness.
Throughout the year, we met with our regulators, covering
a wide range of priorities and emerging themes. Revolut iscommitted to providing not only the management information
required to comply with our regulatory reporting obligations,but also to sharing insights on Revolut’s approach to solving
industry problems and proactively demonstrating what itreally means when we say Revolut is data-driven. This enables
us to foster a collaborative and harmonious relationship,
which is vital in the rapidly evolving sector Revolut operates
in. We keep our Board informed of ongoing engagementswith regulators globally through regular reporting and direct
engagement with our dedicated Regulatory Affairs team.
Our philosophy on regulatory relationships extends across a
range of organisations. In the UK, this includes the Financial
Conduct Authority (FCA), Prudential Regulation Authority(PRA), Payments Services Regulator (PSR), Competition
and Markets Authority (CMA), Information Commissioner's
Office (ICO), National Crime Agency (NCA), The Gambling
Commission, The Home Office and many more.

We are also committed to developing and maintaining strong
fraud controls in order to ensure the safety and security of
our customers and our partner banks’ clients. To achieve thisobjective, we have an established operating model for fraud
prevention within our Financial Crime department.
Revolut takes a data-driven approach to fraud management,
deploying sophisticated fraud modelling controls for both
inbound and outbound transactions to prevent and detectfraudulent funds entering Revolut accounts, whilst also
protecting Revolut customers from falling victim to fraud
and scams.

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Strategic Report

Our Partners
and Suppliers

Engaging with Stakeholders

Our Customers

Our Employees

Our Investors

Our Regulators

Our Partners and Suppliers

Strategic Report

We continue to expand our strategic partnerships, which are an effective way toincrease our value proposition to customers, and our supplier relationships. These are
incredibly important as we grow our services and geographic reach. Trust is integral
to our relationships with our partners and suppliers, and we work to ensure thatthese relationships remain mutually beneficial and adhere to our high standards ofbusiness conduct.
Revolut is committed to complying with all applicable anti-bribery and corruption laws
and regulations, and does not tolerate bribery or corruption in any form. We requiretransparency and integrity in all our business dealings to avoid any improper advantage
or the appearance of questionable conduct by our employees or associated third
parties. All material third parties with whom Revolut proposes to contract are subject,prior to contracting, to stringent due diligence assessments by our third party risk
team and these assessments are refreshed at regular intervals.

Customers donated£14.5 million via
Revolut in 2022

Impact of Operations on the Environment

At Revolut, we are committed to making a positive impact on
the world. Since our founding in 2015, we have built a digitalplatform designed to democratise financial services globallyand help our customers simplify all things money. Throughleveraging our core strengths, namely our talented people
and innovative products, we aim to champion sustainable
initiatives, meet customer and regulatory needs and promotemeaningful change.
As a digital institution, our direct physical impact on theenvironment is relatively low compared to traditional
institutions. Further reducing our carbon footprint andenhancing our social impact across our markets remains animportant goal for Revolut.

Revolut has a zero-tolerance policy to modern slavery and is committed to ensuringthat there is no modern slavery or human trafficking in its supply chains or in any
part of its business. Revolut's policy reflects the commitment to act ethically andwith integrity in all business relationships and to implement and enforce effective
systems and controls to ensure slavery and human trafficking is not taking place insupply chains.

32

Making a Difference

Environmental,
Social andGovernance (ESG)

Third parties associated with Revolut are prohibited from offering, promising, giving or
authorising any form of solicitation, agreement to receive, or accepting anything that
constitutes or could be perceived as constituting bribery or corruption, and, as noted
above, all employees are provided with training on how to identify this behaviour.

Revolut Annual Report 2022

Environmental, Social and Governance (ESG)

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33

Strategic Report

Environmental, Social and Governance (ESG)

Making a Difference

Impact of Operations on the Environment

Strategic Report

Making a Difference
As we reflect on 2022, we are proud to have continued ourcommitment to supporting charitable causes and helping
our customers make a difference. Our Donations productachieved significant milestones and impactful partnerships,
allowing us to make a positive impact on a global scale.
We supported several emergency appeals to provide aid
to those affected by natural disasters, conflict, or other
unforeseen circumstances.
The outbreak of the war in Ukraine saw a surge in donations
from our customers, resulting in our 2022 Ukraine War Appeal
raising £9 million for the Red Cross. On top of this, Revolut
contributed £1.5 million directly to the cause.
Revolut also started providing accounts for all refugees with a
Ukrainian passport or visa who were forced to flee, as well as
waiving any transfer fees to and from the country. More than
250000 people used such accounts, which was a result of
the hard work across multiple departments and functions in
Revolut, including employees volunteering their extra time todeliver the project as quickly as possible. Revolut employees
worldwide supported those affected by the conflict throughdonating supplies and money from team event budgets, andRevoluters in Poland received additional paid time-off sothey could have more time to volunteer. Moreover, Revolut
participated in the 'Devoxx for Ukraine' conference to support
local entrepreneurs.
Our support for the Disaster Emergency Committee's Pakistan
Floods Appeal raised £60,000 to support those affected by
the devastating floods.
Our ongoing partnerships also continued to make a significant
impact in 2022.
For the second year in a row, our partnership with the RTÉ Toy
Show Appeal in Ireland proved successful, raising £2 million
to support children's charities across Ireland. This partnershiphas become a highlight of our Donations feature, and weare grateful to our customers in Ireland for their continued
generosity and support.

Environmental, Social and Governance (ESG)

Making a Difference

Impact of Operations on the Environment

Impact of Operations
on the Environment
We also renewed our participation in the Movember
campaign in support of men's health, raising awarenessand funds for issues such as prostate cancer, testicularcancer and mental health. Through our partnership with
the Movember Foundation, we raised £45,000 in donations
from our customers, contributing to the important work theFoundation does to improve men's health outcomes aroundthe world.
Our partnership with the Royal British Legion Poppy Appeal
allowed customers to donate and receive a limited edition
poppy card. Customers in the UK raised £24,000 for
the appeal.

Revolut is committed to reducing its environmental footprint
and continued working on environmental initiatives in 2022.
Revolut took sustainability-driven office decisions at various
locations around the world during the year. For example, in
2022 we closed one of the three floors in our Krakow office, andthe energy used at our London and Vilnius offices continued
to come from 100% renewable sources. Our employees
worldwide continued to have flexible work options, such as
the choice to work from home, and those going into the officein London could benefit from the Cycle-to-Work scheme.

We continued proactive waste management practices,
including waste sorting and recycling in the offices, reusing
electronic equipment where possible, and donating or
refurbishing used equipment.
Revolut remains proud of its partnerships with sustainabilityoriented charities on its Donations platform. During 2022,
Revolut customers donated £45,000 to the WWF, and£20,000 in partnership with the Rainforest Alliance.

To support LGBTQ+ communities, Revolut participated in
the New York City Pride Parade, as well as partnering withILGA (International Lesbian, Gay, Bisexual, Trans and Intersex
Association) in a donations campaign.
We have continued our charitable support in 2023.
In response to the earthquake in Syria and Turkey, Revolut
supported multiple charities, including the Disasters
Emergency Committee (member charities being the British
Red Cross, Save the Children and Action Against Hunger), as
well as the Irish Red Cross and the UN Refugee Agency on the
Syria and Turkey Appeal, raising £1.5 million in just four days.
This is a testament to the generosity of our customers andthe importance of our Donations product in times of crisis.
Looking ahead, we remain committed to supporting charitablecauses and making a positive impact in the world.

£9 million raised for the
British Red Cross’s Ukraine
Crisis appeal

In 2022, we launched the Revolut Ira Scholarship in India to
identify and reward female leaders of the future. Revolut
awarded the scholarship to five female students from the top
five management institutes in India.

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Strategic Report

Environmental, Social and Governance (ESG)

Energy Usage andGreenhouse Gas
Emissions

Impact of Operations on the Environment

Energy Usage and Greenhouse Gas Emissions

Strategic Report

We measure the Group's carbon footprint through the software platform, Watershed.
We also measure our Scope 1, 2, and 3 emissions, which covers the entirety ofour business operations, including our staff (e.g. commuting and business travel),
our offices, our product (including cards, marketing costs and servers), as well as
our partners and suppliers. The table below lists Revolut Group's greenhouse gas
emissions and global energy use in accordance with the UK's Streamlined Energy andCarbon Reporting (SECR) framework.

Our People

Code of Conduct

Diversity and Inclusion (D&I)

At Revolut, we are proud to have cultivated an environment
where employees are both challenged and supported toreach their full potential. In 2022, we created a unique career
progression model that includes three distinct levels acrossmost seniorities in the company, yet it is intentionally designed
not to be restrictive or limiting. Our employees can move tothe next level of seniority in as little as one year. In the Q4 2022
performance review, 331 employees earned promotions.

Emissions were calculated following the GHG Reporting Protocol (Corporate Standard)using the Watershed platform. Energy usage data was collected or estimated basedon building square-footage for all facilities, and was combined with emissions factors
from the US EPA, Ecoinvent, TCR and other data sources to calculate GHG emissions.
The emissions factors for electricity are chosen based on geography to reflect theemissions intensities of the facilities’ local grid.

2021

UK andOffshore

Global (Excluding
UK and Offshore)

UK andOffshore

Global (Excluding
UK and Offshore)

Energy consumption used to calculate emissions(Scope 1 and 2)

644,695 kWh

1,006,915 kWh679,900 kWh

761,191 kWh

Emissions from combustion of gas tCO2e (Scope 1)

11.9 tCO2e

11.8 tCO2e

0 tCO2e

0 tCO2e

Emissions from combustion of fuel for transport
purposes (Scope 1)

0 tCO2e

0 tCO2e

0 tCO2e

0 tCO2e

Emissions from business travel in rental cars or
employee-owned vehicles where company is
responsible for purchasing the fuel (Scope 3)

0 tCO2e

0 tCO2e

0 tCO2e

0 tCO2e

Emissions from purchased electricity, heat, steam andcooling (scope 2, location-based)

112 tCO2e387.3 tCO2e

144.4 tCO2e

337.9 tCO2e

Total gross tCO2e based on above fields

123.8 tCO2e399.1 tCO2e

144.4 tCO2e

337.9 tCO2e

UK andOffshore

Global (Including
UK and Offshore)

UK andOffshore

Global (Including
UK and Offshore)

0.13

0.57

0.23

0.76

Intensity ratio: tCO2e per £ million of revenue

Equal Opportunities

Our People

Methodology

2022

Engagement with Employees

Revolut maintained its position as a highly respected
employer, including receiving a LinkedIn Top Startup award in
the UK for the fifth consecutive year.

Attracting, retaining and nurturing talented people while
fostering an inclusive and diverse work environment is ofparamount importance to us. Our teams define our success,and we are committed to enhancing their workplace
experience and developing their skills.
In 2022, we continued to prioritise employee wellbeing,
recognition, strategic communication and promotions bybuilding upon our commitments from 2021 and extendingthem.
We have a high-performance culture that has driven our
success to date, and in 2022 we introduced value-based
behaviours - clear, transparent definitions to ensure the sameunderstanding of our culture within our growing organisation.
We also included them in our performance reviews to guide
unique and diverse talent at Revolut worldwide. We enhanced
our in-house feedback tool to enable our employees toeffectively share feedback and learn from it. To further build
on our commitments, we have launched CultureLab, a teamto create an immersive corporate culture and improve our
employee experience.
In 2022, we launched our Manager Essential Programme,a six-week blended learning initiative involving e-learning,hands-on work sessions and a certification process withmanager check-ins. As of the end of 2022, more than 90%
of our managers had been certified through this programme.

We believe in entrusting our employees with significant
responsibility and ownership over their areas of expertise,
which is reflective of our relatively flat organisational structure.
With 44% of our team members operating at the 'CEO -3'
level (just three steps from the CEO), and 81% at the 'CEO
-4' level, we ensure that decision-making responsibility andaccountability are spread across all ranks.
We are also building on the successful real estate policy
we launched in 2021. Our offices have been repurposed
as flexible collaborative spaces, offering our employees arange of working options. We are pleased to report that
we have received overwhelmingly positive feedback fromour employees regarding this policy. As a result, we havecontinued to enable the vast majority of our team members
to choose when and how often they would like to work fromhome or visit the workplace. In 2022, roughly 50% of newjoiners were remote, compared to 36% in 2021. Our approach
has allowed us to maintain our commitment to employee
wellbeing and safety. To tackle the challenges arising fromremote work, we have allocated engagement budgets, so
teams can create social experience initiatives. Overall, we aredelighted with the success of our real estate policy and lookforward to further building on it in the future.

In addition, more than 70% of our managers had completed
our Manager Intermediate Programmes, focused on
feedback, coaching and performance management skills
in 2022.

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Strategic Report

Our People

Code of Conduct

Code of Conduct

Diversity and Inclusion (D&I)

Engagement with Employees

Equal Opportunities

Strategic Report

Revolut’s Group Code of Conduct emphasises the expectation that our employees
act with integrity and in the best interests of our customers, colleagues and wider
stakeholders.

Our People

Engagement with Employees

Engagement with
Employees

We believe that brilliant people, working together in an honest, high-achieving culture,
are the key to delivering amazing products that delight our customers. We know thatour behaviour towards one another is critical to that success. Our Code of Conduct
sets out the principles that guide the ways we behave and the decisions we makeand ensure we act with integrity and in the best interests of our customers, people,
communities and stakeholders, at all times.

Diversity, Equity
and Inclusion (DE&I)

We published our second UK Gender Pay Gap report, as partof our ongoing efforts towards achieving gender equality.
We recognise the importance of actively increasing ourdiversity, and are working to widen the diversity of ourcandidates, which will allow us to further monitor and improvediversity in our recruitment efforts.
Our inclusive guilds programme continues to flourish, with
our five original guilds still active, focusing on Women, Pride,
Parents and Carers, REACH (Race, Ethnicity and Cultural
Heritage) and Wellbeing. In light of the success of theseguilds, we have launched two more, focused on Disability,
and Religion and Belief. Our guilds provide a valuable platform
for our colleagues to connect, collaborate and drive positivechange initiatives, supported by executive sponsorship toensure strong leadership and guidance. We remain committed
to promoting D&I across our organisation and look forward tocontinuing this important work.

Despite the advancements made in support of D&I, we knowthat we still have a lot of work to do. Our D&I framework is
made up of eight strategic pillars, which include ‘Tone fromthe Top’ and ‘Inclusive Workplace’. Our progress is reported
to our Group Board and Group Executive Committee, as wellas on our website. Successes since we launched our D&I
Framework include the following:

Our in-house engagement product ‘Revolut Voices’ captures employee feedback
anonymously to assess employee engagement and satisfaction. The data is closely
monitored within the talent department to ensure necessary action is taken tocontinue to drive positive employee engagement within Revolut. Our dedicated HR
people partners discuss the data with the Board, and also regularly with Heads ofDepartments and their teams.

We've also introduced the Revolut Spires programme to support our Dream Team’s
big career leaps to different teams within the company. Launching globally, Revolut
Spires will be re-skilling employees who are interested in the roles of Data Analyst,
Data Scientist, Python Engineer, Java Engineer, and Web/Front-end Engineer,with more roles to be added later in 2023. Successful candidates will be given a
personalised learning and development programme to build their new skills.

Equal Opportunities

At Revolut, we are committed to treating all employees and job applicants with fairness
and respect, and to providing equal opportunities to everyone, regardless of theirpersonal characteristics. We believe in creating a harmonious work environment,
free from any form of discrimination, harassment, bullying or victimisation.
We understand that treating each other with mutual respect is essential for
maintaining a positive work environment and achieving our shared goals. That's why
we have separate policies in place to address issues of harassment and bullying,
and we take all reports of such behaviour seriously.

⚫ Implementing a company-wide female representation
target of 30% of women in leadership roles by the endof 2025.
⚫ Incorporating tracking and formal controls in our promotion
process to ensure gender equity in nominations andpromotions.
⚫ Launching our new promotion philosophy to provide
greater transparency regarding career progression at
Revolut. For example, we can state that in Q4 of 2022,
20% of men and 19% of women at Revolut were nominatedfor promotion, and of these, 67% of the women and 66%of the men achieved promotion following nomination.

Employing People with Disabilities

Revolut ensures effective communication with its staff through various channels.
The CEO conducts quarterly town halls, newsletters are regularly shared to update
employees on company goals and KPIs and key company announcements arepromptly shared via dedicated Slack channels. Additionally, our weekly newsletter
provides a comprehensive update on company and product news for all Revoluters.

At Revolut, we want our Dream Team members to feel valued and accepted, and weunderstand how important it is for everyone to have the opportunity to reach theirfull potential. That's why we place a high priority on creating an environment that isdiverse and inclusive.

We’re pleased to report progress on our Diversity, Equity andInclusion (DE&I) initiatives. To demonstrate our commitment
to transparency and accountability, we conducted a diversity
data survey, which achieved a 78% completion rate. The
voluntary and confidential survey is open to all Revolut
employees and asks them, among other questions, to share
their gender, race and sexuality to help us measure thediversity of our workforce.

Equal Opportunities

Our goal is to foster a work environment where everyone feels supported, and that
there is a celebration of individual differences. By promoting equality and respect,
we know we can create a workplace culture that benefits everyone at Revolut.

Employing People with
Disabilities⚫ Attending our first ever in-person Pride event in New York
City and held parties in offices across the world during
Pride Month.

We are committed to adhering to the Equality Act 2010 and our Equal Opportunities
policy to ensure that our colleagues are treated with respect and dignity.
We recognise the importance of providing reasonable adjustments to support all
job applicants and colleagues with disabilities, and we are fully committed to making
sure that they feel valued and supported throughout their employment.
In 2023, we started collecting information on disability to add to our diversity data,with 4% of Revoluters identifying themselves as neurodiverse or living with a mental
illness and/or disability.

⚫ Working on continuous and ongoing review of ouremployee policies and ensuring all our policies support
under-represented groups.
⚫ Supporting the career development of diverse Revoluters
through successful Reverse Mentoring, Speed Mentoringand 'Yes You Can' initiatives.

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Strategic Report

Our People

Reward and Share ownership

Reward and Employee
Share Ownership

The Revolut Partner
Programme

The Revolut Partner Programme

Strategic Report

At Revolut, we know that our employees are the driving force behind our success.
That's why we show our appreciation for our team members through our actions.
We offer our employees the opportunity to earn a portion of their total reward packagein the form of Revolut share-based awards. These share-based awards (in the formof options) offer our team members a tangible stake in our company's future successand growth, as well as the opportunity to benefit financially from that success.

Chief Risk and Compliance Officer’s Review

Chief Risk and Compliance
Officer’s Review
The mission of the Risk and Compliance function at Revolut is
to develop and manage a robust framework and provide thenecessary oversight to enable our global business to grow in abalanced and sustainable way, and as a natural consequencedeliver good outcomes for customers.

In 2022, we continued to build out the Revolut global Partnership programme,
designed to reward exceptionally high-performing employees with a track record ofcontribution to the business, exceptional integrity and a consistent commitment to
Revolut's mission and values as a culture champion. Our partners are elected basedon their contribution to the entire organisation and ongoing commitment to our corevalues.

We have taken this mission very seriously over the years
and 2022 was no exception. We have continued to manage
our principal risks within appetite, whilst accompanying thebusiness along its journey of growth, revenue diversification,
new product launches and global expansion. This achievement
is set against a backdrop of increasing geopolitical andmacro-economic complexity as well as industry-disturbing
events, which have led to a noticeable increase in regulatory
scrutiny in all our key jurisdictions.

In the second year, we expanded our Partner pool to a total of 26 (from 17 in 2021).
The nomination round consists of a re-evaluation of the competencies and skills of
existing partners, standardised over a set of contribution metrics, making this a highly
selective process.
Partners have been acting as role models to all Revoluters and our star players
have been successfully pushing critical company initiatives. Similarly, we would
like to acknowledge the hard work of the many potential candidates who were notselected this year. We look forward to more exceptional colleagues contributing to
the company's overall success by joining the Revolut Partnership programme in the
coming years.

Pierre Decote
Chief Risk and Compliance Officer

Our Partner Program is designed
to reward exceptional contributors

Over the course of 2022, Revolut has strengthened its ‘Threelines of defence’ (3LoD) and has made significant progressin maturing its risk operating model. We have bolstered our
second line of defence in line with the size and complexity ofthe business with 256 employees in the function at the end of2022, compared to 206 in 2021.

Within the product and services part of the business, we have strengthened the firstline risk and compliance capability by deploying additional Business Risk Managers
and Business Compliance Managers in key commercial areas. In turn, this has enabled
us to enhance our ability to launch products more efficiently and in a controlled mannerby taking into account risk and compliance requirements from inception. We havealso launched the concept of Risk and Compliance Accreditations (RCA), an internal
certification process that gives certain parts of the business the ability to operate withmore autonomy and responsibility with regards to some of the daily management of
the risk and compliance profile in their areas.
Additionally, as Revolut Group continues to expand, and as regulated entities indifferent markets and jurisdictions continue to mature, we have deepened our oversightmodel to ensure all entities within the Group operate in line with our Enterprise Risk
Management Framework (ERMF) and that they have sufficient resources to handle theoperations of their respective permitted activities.

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Strategic Report

Chief Risk and Compliance Officer’s Review

Strategic Report

At Revolut all colleagues are responsible for managing risk. And our Risk culture is an
essential element of how we manage risk and our compliance obligations. We define
our Risk culture as the set of shared beliefs and values which underpin how we makedecisions that affect our risk-taking activities. To promote these values, we launched
the concept of ‘Karma’ in 2020. Karma is an industry-defining proprietary scheme to
track, measure and incentivise good risk and compliance behaviours and practice.
This occurs through a scoring mechanism, which assigns points to behaviours,
practices and outcomes related to risk. This, in turn, impacts performance awards
in accordance with our remuneration arrangements. Throughout 2022, we havecontinued to expand the coverage of Karma, which has continued to act as a powerfultool to drive adherence to our ERMF and embed a strong risk and compliance culture
at Revolut.

Risk Management and Compliance

Our Approach toEnterprise Risk
Management

The ERMF document is aligned with Revolut’s strategy and Risk Appetite Statement
to ensure that risks are defined, that tolerances are formally set and agreed by
the Board, and that there is a formal structure in place to help ensure execution is
managed to align with the Board’s strategic intentions. Effective risk management
enables focus on the priorities of the business and delivers a high-quality
assessment of risks in the decision-making processes through open discussions
and challenges about risks and opportunities.
Our ERMF clearly defines meaningful risk categories, which are consistently used
when identifying, assessing and managing risks. This ensures adequate risk
coverage in terms of risk capture as well as reliable and useful risk aggregation andreporting. Aggregation of risks by risk categories allows for an analysis of any risk
concentrations to which Revolut may be exposed. Visibility of risk through our risktaxonomy also assists Internal Audit in annual planning and priority setting.

I am proud of the way that we continue to manage risk and compliance at Revolutand the strong risk culture we have built. I continue to look forward to continued
investment and focus in these key areas of our business.

Revolut has a two-level risk taxonomy. Level One (L1) is the principal risk category, of
which there are five: Financial Risk, Operational Risk, Compliance Risk, Conduct Risk
and Strategic Risk. Level Two (L2) is the specific risk areas within each Level One
category. We also maintain a standardised risk library, which ensures consistency
and completeness in the detailed risks within each of the L1 and L2 categories.

L1 Taxonomy Risk

Description

Strategic (business)

These are the risks that threaten the business as a whole and could prevent Revolut from achieving its key businessand strategic goals.

Operational

These are the risks arising from failures in internal processes, people or systems, or from external events that impact
the business. All businesses must bear a level of Operational Risk and this tends to increase with the business sizeand complexity.

Financial

These are the risks relating to our financial assets and liabilities, including credit risk, market risk, liquidity risk
and capital. We actively take some financial risk as part of our business model (such as credit risk when lending
to customers).

Compliance

These are the risks pertaining to Revolut not meeting its obligations under the laws, regulations and industry bestpractices in the jurisdictions in which it operates.

Conduct

These are the risks of any act or omission by Revolut (or those on its behalf) leading to poor outcomes or detrimentto customers and stakeholders, or creating adverse effects on market stability or effective competition.

19 December 2023

42

Revolut operates a comprehensive Enterprise Risk Management Framework (ERMF),
which establishes our approach to identifying, measuring, monitoring, mitigating
and reporting risks of all types. It documents the methods, tools and governancestructures within our 3LoD operating model. The ERMF clearly articulates roles
and responsibilities across the Group, while setting the ground rules applied tomeasuring, managing, reporting and escalating risk matters.
This consistent approach provides management and the Board with confidence
that the entire Group is operating within risk appetite while allowing appropriate
flexibility to meet the specific needs and regulations of each legal entity and region.

This body of work has enabled us to deliver strong risk and compliance results in
2022. Key output measures show clear signs of the maturing of the organisation and apositive evolution of our risk profile. Despite headwinds and turmoil, we have supported
the business in delivering a strong financial performance and its commercial goals.
We remain aware of the challenges ahead and are keeping track of the evolution of
our environment through a rigorous horizon scanning process.

Revolut Annual Report 2022

Three Lines of Defence Model

Risk Management
and Compliance

As a business, Revolut's ethos is about building beautiful and cutting-edge products,
and our risk and compliance tools fit into this vision. We have continued to invest
significant time and effort in the development of our industry-leading, data-driven
infrastructure. We have also continued to enhance the linkage and interconnectednessof various risk and control assets, allowing us to obtain a better picture of the risk
profile of the firm. We have also delivered key features in Aurora, our regulations andpolicy portal, the platform through which we manage all our policies and connect
them to applicable regulations using our own in-house developed regulatory mapping
processes. Finally, we have launched our new financial risk portal, a platform that isrequired as we have grown and diversified our investment activities.

Pierre Decote
Group Chief Risk & Compliance Officer

Our Approach to Enterprise Risk Management

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Strategic Report

Risk Management and Compliance

Our Approach to Enterprise Risk Management

We continued to evolve our ERMF during 2022 to reflect
the risk management implications of growth and increased
complexity in our corporate structure, geographical reachand product breadth. We designed and incorporated
additional tools and approaches to strengthen our grip on ourrisk profile. Examples of this include:⚫ The enhancement of our process for the identification,
monitoring, mitigation and remediation of our top risks.
⚫ The implementation of a standardised risk library andmapping of the risks within Revolut across all departments
to this library. This enables the standardisation of thearticulation of risks across the entire organisation and theaggregation of similar risks from different departments,
allowing for a comprehensive view of the overall risk
profile.
⚫ The enhancement of our risk and control register within
the Risk Platform by incorporating visual representationsof risks and related risk events which ensure a more
efficient and effective risk management process.

Three Lines of Defence Model

Strategic Report⚫ An enhanced ‘Watchlist’ framework to better identify andmonitor areas of the business that warrant a heightenedlevel of oversight from the Risk & Compliance function.
⚫ The strengthening and broadening of our 'black swan' risk
identification process to capture highly unlikely scenarios,
which could have a significant impact on Revolut’sbusiness.
⚫ The documentation of roles and responsibilities across the
3LoD and incorporation of these into the ERMF to provide
additional clarity to all lines of business on how the ERMF
components should be followed and embedded.
⚫ The enhancement of our in-house policy management
platform to help us establish direct linking of policy
statements to the control register. This integration allows
for seamless monitoring of policy application through theannual control testing process, effectively automating thepolicy adoption process.

Risk Management and ComplianceThree Lines of Defence Model

Risk Strategy and Risk Appetite

Risk and Compliance Culture

Three Lines of
Defence Model

Revolut deploys the Three Lines of Defence (3LoD) operating model for risk
management. The 3LoD model enhances the understanding of risk management andcontrol by clarifying the different roles and duties expected. The 3LoD model operates
across the different layers of the corporate structure.

1LoD

2LoD

This describes all the risk-taking functions ofRevolut.

3LoD

This describes the risk monitoring andoversight functions of Revolut, defined as the
Risk Management function, the Regulatory
Under the 1LoD, operational management has Compliance function and the Financial Crime
ownership, responsibility and accountability Compliance function. The 2LoD is governedfor directly assessing, controlling and by the Board Risk and Compliance Committee
mitigating risks.
(BRCC).

This refers to the Internal Audit function whichis governed by the Board Audit Committee(BAC).

The BAC is composed of Independent NonExecutive Directors and ensures that theInternal Audit function is operating effectively
in providing independent and objective
Revolut’s risk platform ('Back Office') ensures The 2LoD defines and maintains the risk assurance over risk management, control andclear ownership of risk and controls are management framework and underlying governance processes.
allocated to the right 1LoD people.
policies and processes.
Internal audit is tasked with performing inBusiness Risk Managers and Business The 2LoD provides independent reporting and depth reviews of the effectiveness of theCompliance Managers are situated within management information (MI) to management controls over Revolut’s key risks.
departments to embed risk management and the Board via risk governance structures.
practices.
The 2LoD provides training and guidance to
1LoD to help risk owners to identify, manage
and monitor risks, and to review and update
the risk register with appropriate controls andmanagement actions.

Risk Strategy and
Risk Appetite

Our risk strategy is the bridge between the Group’scommercial strategy and the Group's risk appetite. It is basedon the following guiding principles:⚫ Responsible, controlled and sustainable growth.
⚫ Prioritising our prudential risk obligations by maintaining
adequate capital and liquidity resources to support
growth in a safe and appropriate manner.
⚫ Complying with regulatory requirements across all ourjurisdictions.
⚫ Building and maintaining confidence of all our businessstakeholders (internal and external).
⚫ Developing and retaining people with a growth andmature risk and compliance mindset who are committed
to balancing speed and quality of delivery with soundgovernance processes.

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Strategic Report

Risk Management and ComplianceThree Lines of Defence Model

This strategy is supported by the Group Risk Appetite
Statement, where Revolut’s Board determines the significant
risks and aggregate risk levels that it is willing to accept inorder to achieve its objectives. In some cases, we are notwilling to accept exposure to certain risks and a strategy offull risk reduction is adopted. In other cases, we are willingto accept a moderate level of risk inherent in our chosenbusiness model as long as the risk is taken rationally and issubject to appropriate levels of internal control.

Risk Strategy and Risk Appetite

Risk and Compliance Culture

Strategic Report

Revolut expresses risk appetite using qualitative statements
and quantitative limits where relevant. Qualitative statements
are articulated for each risk type in our risk taxonomy. These
are set and approved at least annually by the Board, taking into
account the risk and reward trade-off of business activities.
Key Risk Indicators (KRIs) act as automated preventive
and detective controls. Board-level KRIs are supported by
Executive-level KRIs across the risk spectrum.

Risk Management and Compliance

Governance and Policies

Risk and Control Assessment and Monitoring

We prioritise building trustby establishing a foundationof risk excellence.

Risk & Compliance
CultureWe define our Risk & Compliance culture as the shared beliefs
and values concerning risk and compliance that affect andare affected by our risk-taking and control decisions and theoutcome of these decisions. Revolut believes that a strong
Risk & Compliance culture is supported by an understandingof individuals’ roles and responsibilities within the threelines of defence, and an alignment with the company goals
and values.
Revolut has developed and cultivated a strong risk
management culture by supporting all employees tofamiliarise and undertake risk management and mitigation
activities, which includes ongoing development of knowledge
and skills in risk management that is relevant to their role.
Activities undertaken by the Risk & Compliance function to
influence Revolut’s Risk & Compliance culture include:⚫ Training and awareness building, considering specific anddata-driven training needs (e.g. informed by reporting andresolution of risk incidents, engagement with governanceprocesses, etc.).

⚫ Investment in improving risk processes and tooling toensure they are accessible, engaging and easy to use.
⚫ Incentivisation through positive reinforcement andconsequence management through specific Key
Performance Indicators (KPIs) aligned to our ‘Trustand Reputation’ company goal, as well as our ‘Karma’awards mechanism, a points-based system driven by anevaluation of individuals’ engagement with Second Lineprocesses, which converts into a portion of departmental
bonus remuneration.

Governance andPolicies

Revolut defines governance as the combination of processes and structures
implemented by the Board and management to inform, direct, manage and monitor
Revolut’s activities to achieve its objectives for the benefit of its stakeholders.
Oversight of risk and strategic operations is conducted through the committee
structure outlined in the Directors’ report on page 61.
Policies⚫ Embedding risk management discipline through our
growing network of Business Risk Managers and Business
Compliance Managers situated in our key product andservice teams.
The Karma mechanism, which has now been operational andembedded for two years, has given us a vast and granular
data set which continues to inform our view on risk culture
and allows us to identify where focus is needed to strengthen
our risk and compliance culture.

GovernanceOur policy framework ensures that each risk across the risk taxonomy is addressed
through appropriate policies and procedures that act as directive controls for theoperation of the business. These are established in a tiered hierarchy ranging from
Board-level policies to departmental-level policies and procedures, including:i) Tier 1 - Board-approved policies;ii) Tier 2 - Executive-level committee approved policies; andiii) Tier 3 - Departmental management-approved policies.

Risk and Control
Assessment andMonitoring

Risk assessment provides management with a view of events that could impact
the achievement of its objectives. It is integrated into management processes andconducted using a top-down approach (see principal risks and uncertainties, below)that is complemented by a bottom-up assessment process. Our risk taxonomy
ensures adequate coverage and enables risk data aggregation at multiple levels.
This assessment process combines probability of occurrence (from almost certain
to unlikely) with impact, using a framework that assesses impact from financial,customer, regulatory, employee and media perspectives.
For our product and services, embedded Business Risk Managers conduct first-line
risk and control assessments with oversight from second-line risk management.
Within regulated entities, oversight is provided by the entity’s CRO (or equivalent) andrisk team. These assessments are dynamic so that our view of risks and controls
keeps pace with changes to our organisation, product offering and the risks we face.
While assessment of risks and controls is first and foremost the responsibility of our
first-line teams, the outputs of those are subject to oversight by Second Line Risk
& Compliance. We gain additional assurance over our risk and control environment
by conducting dedicated Compliance Assurance reviews and through our Third LineInternal Audit reviews.

Revolut Annual Report 2022

46

Revolut Annual Report 2022

47

Strategic Report

Risk Management and Compliance

External Environment
Scanning, Scenario
Analysis and Stress
Testing

External Environment Scanning, Scenario Analysis and Stress Testing

Strategic Report

External environment scanning is the practice of monitoring the business environment,
and tracking the changes in the environment that could have an impact on individual
businesses. Understanding change in the business environment is a key elementof proactive risk management, ensuring Revolut is adequately prepared for futurechallenges. We perform external scanning, mainly resorting to two main processes:
emerging risk identification and regulatory horizon scanning.

Risk Management and Compliance

Principal Risks andUncertainties
Principal Risk

Principal Risks and Uncertainties

Emerging Risks

The table below enumerates our main risks, aligned to the risk taxonomy, withcommentary on how these risks are managed and a forward-looking view on how
they may evolve.

Mitigants and Controls

OutlookStrategic Risk

⚫ Emerging risks are new, as yet unidentified and difficult to quantify risks that may
have a significant impact on Revolut’s ability to deliver its strategy or on its key risk
exposures. We have strengthened and further structured our approach to theiridentification and assessment.
⚫ Horizon scanning is our process by which we constantly review regulations,legislations and industry publications to assess their applicability to Revolut.
Scenario analysis refers to the quantification and explanation of the impact of therisks contained within a scenario, which allows the Group and its entities to assess
the risks and propose appropriate mitigating actions. Revolut conducts this analysis
as part of its various stress testing activities, whereby analysis is performed basedon quantitative techniques, supplemented with qualitative overlays, to provide
quantitative assessments of a defined scenario. In addition to the standard stresstesting exercises, we deployed ad hoc scenario analyses on a series of high impact /low probability (‘black swan’) events that could derail our strategy.

Revolut Annual Report 2022

48

Strategic Risks are those risks thatthreaten to disrupt the assumptions
underpinning Revolut's business modeland strategy, thereby materially affecting
the achievement of our strategic
objectives.
Revolut approaches Strategic Risk
management from two perspectives:
1.
2.

Strategic planning
Strategic execution

The Strategic Risks Revolut is most
focused on include:⚫

External factors, such as the inability
to identify, assess and manage
macroeconomic, regulatory, politicaland societal factors that may hinder
the execution of our strategy. This
includes our ability to identify andplan for high-impact events.

⚫

The risk that our company culture isunsupportive of our strategic goals.

⚫

The Reputation risk from theperspectiveofourvariousstakeholder groups, which may arise
often as a second-order impact ofrisks emanating from our chosen
strategy.

⚫

Sustainability of growth initiatives
entailing the risk of short-term gains
coming at the expense of long-term
detriment.

⚫

Operationalisation risk, which may
result in slowing down the deliveryof our product offerings and entity
structure; and the risk arising fromthe inability to adapt and iterate our
product offering to fit several target
markets.

Revolut Annual Report 2022

Revolut’s strategy is defined by the
Board and overseen by the Executive
Committee. The strategy is articulated
through company goals and measured
by KPIs (Key Performance Indicators).
Threats to our strategy are monitored
through KRIs (Key Risk Indicators) andother automated monitoring tools withformal processes to investigate andremediate potential or actual breaches
to appetite.
Revolut’s top Strategic Risks aredefined with the Group CEO and
Executive team and regularly analysed
and reviewed. A report which details
the top Strategic Risks, their impact
on company goals, their mitigants andfuture developments is presented on aquarterly basis to the Group Executive
Risk Committee and Board Risk &Compliance Committee.

Revolut closely monitors changes to themacroeconomic, political and regulatory
landscapes to ensure the impact on ouroperations are understood and contained.
Multiple work streams are underway andthorough stress testing and risk analysis
has been conducted factoring in a numberof external scenarios and/or events thathave or were expected to materialise
during the financial year. Particular focus
has been given to the assessment of theimplications of volatility in the current
macroeconomic environment.
We continue to enhance our monitoring
capabilities and assessment of our
reputational risk, by expanding the use ofinternal and external data factoring in our
growth.
We remain conscious of the significant
pace at which the business is growing
and we continue to invest in building ourprocesses and governance that serve as
a guard against uncontrolled growth andimpacts to operations.

49

Strategic Report

Risk Management and Compliance

Principal Risk

Principal Risks and Uncertainties

Emerging Risks

Mitigants and Controls

Strategic Report

Outlook

Risk Management and Compliance

Principal Risk

Financial: Capital Risk
Capital Risk is the risk that Revolut does
not hold adequate capital to support its
business activities based on its regulatory
requirements and risk profile.
Revolut identifies the following risks as
the top risks related to capital:⚫

⚫

Capital adequacy in an idiosyncratic
or market stress scenario, or to
support growth.
Ability to raise funds on commerciallyacceptable terms based on dynamic
market conditions, such as arecession.

Capital Risk is mitigated using KRIs thattrigger immediate intervention if theGroup’s capital position deteriorates.
The Group holds capital buffers,
ensuring that it has sufficient capital
based on its risk profile to mitigate theimpact of stress. Capital requirements
for the Group are re-assessed on
an annual basis through the Internal
Capital Adequacy Assessment Process(ICAAP). Recovery planning is also
reviewed and updated on an annual
basis.

Having a well-established process
to monitor the capital position at
a Group level, including quarterly
forecasting taking into accountplanned growth and launch of newentities, with a range of capital KRIs
and a detailed recovery plan to
manage scenarios where there is arisk of any capital shortfall.

⚫

Establishingmacroeconomic
monitoring and incorporating this
into the recovery plan framework,
to allow appropriate actions to betaken in response to changes in themacroeconomic environment.

Revolut has, and expects to have in the
future, sufficient capital to support its risk
profile.
Based on our ICAAP stress testing, theGroup has sufficient capital to withstanda range of severe, but plausible stressevents.

Revolut Annual Report 2022

Revolut’s key liquidity policy is
to maintain a liquidity buffer of
unencumbered, high-quality cash
instruments and securities that arereadily convertible to cash to ensurethat it can meet all its financial
obligations
inbusiness-as-usual
circumstances and in stress conditions.
Liquidity requirements for the Groupare re-assessed on an annual basis
through the Internal Liquidity Adequacy
Assessment Process (ILAAP).

Mitigants and Controls

Market Risk is the risk that Revolut’s
earnings, capital or ability to meetbusiness objectives could be adversely
affected by changes in the level orvolatility of market variables, whichmight include changes in interest rates,
credit spreads, commodity prices, equity
prices, cryptocurrency prices and foreignexchange rates.

Revolut’s Market Risk is managed bymonitoring its exposures using KRIs forthe key risk drivers, setting appropriate
risk limits and using hedging
transactions
where
appropriate.
We assess market risk under BAU
and stressed conditions. Our KRIs
include, but are not limited to, metrics
monitoring FX, crypto and commodities
rates and Fair value.

Revolut provides foreign exchange,commodity and cryptocurrency services
to its customers via multi-currency
wallets that allow spending in different
currencies, creating exposure to various
market risk drivers. Revolut is also
exposed to foreign exchange risk arisingfrom various corporate activities andstemming from revaluation of contractual
cash flows or assets and liabilities
denominated in foreign currencies.
Interest rates and foreign exchange rate
movements can affect the market valueof some assets, which exposes Revolut tofair value risks.

Outlook

Foreign exchange, commodity andcryptocurrency exposure is maintainedat relatively low levels through a standard
hedging policy. Revolut maintains somestructural foreign exchange positions,which are managed and monitored
using the existing Market Risk metrics.
Revolut expects an increase in fairvalue risk arising from specific treasury
assets which are used to back e-money
deposits, but monitors and manages thisrisk through the use of dedicated risk
metrics and limits.

Financial: Interest Rate Risk in the Banking Book
Interest Rate Risk in the Banking
Book (IRRBB) refers to the current orprospective risk to Revolut’s capitaland earnings arising from adverse
movements in interest rates that affectour banking book positions.

Financial: Liquidity Risk
Liquidity Risk is the risk that Revolut
cannot meet its financial obligations
when they fall due. It includes Funding
Risk which is the risk that Revolut does nothave sufficient stable sources of funding
to meet its financial obligations when theyfall due or can do so only at excessive
cost. Risk arises when assets maturing
during a particular period are lower thancorresponding liabilities maturing during
the same period. An unexpected increasein assets or a decrease in liabilities canalso create Liquidity Risk.

Emerging Risks

Financial: Market Risk

With respect to the top Capital Risks,
the Group mitigates them by:⚫

Principal Risks and Uncertainties

Revolut has, and expects to have in the
future, sufficient excess unencumberedliquidity to support its business-as-usual
and contingent financial obligations.

Revolut is exposed to IRRBB to theextent that there is a structural repricing
mismatch between assets and liabilities.
Revolut uses client deposits and equity tofund lending activity with excess funding
being held in the form of cash and liquid
securities, generating interest income
with various repricing profiles.

50

Revolut Annual Report 2022

Revolut monitors its IRRBB exposure on
an ongoing basis by reviewing metrics
for sensitivity of net interest income
and economic value of equity by
applying interest rate shocks, including
those prescribed by the regulator.

Revolut’s balance sheet is expected to
evolve as clients migrate from payment
entities to banks, the credit offering isincreased and investments in treasury
assets continue to ramp up. Thesechanges will influence the interest raterisk to which Revolut is exposed.
Revolut maintains a conservative IRRBB
position, ensuring that our Economic
Value of Equity (EvE) sensitivity isappropriately hedged whilst minimising
Net Interest Income (NII) sensitivity.

51

Strategic Report

Risk Management and Compliance

Principal Risk

Principal Risks and Uncertainties

Emerging Risks

Mitigants and Controls

Strategic Report

Outlook

Risk Management and Compliance

Principal Risk

Financial: Credit Risk
Revolut is exposed to wholesale, retailand business Credit Risk. The majority of
its wholesale Credit Risk arises throughthe placement of corporate funds andsafeguarded client funds with financial
institutions, plus exposure to high-quality
sovereign and corporate counterparties
through treasury assets.
Revolut's retail and business credit
portfolios comprise of lending toindividuals, primarily unsecured personalloans and credit cards, and credit
exposure to individual businesses due to
Revolut's merchant acquiring services,
both in a range of countries.

All wholesale counterparties giving
rise to Credit Risk are assessed atleast annually and assigned a Credit
Risk limit commensurate with their risk
profile, subject to approved materiality
thresholds. Exposure to individual
financial institutions is gradually being
diversified through the growth oftreasury assets.
Retail and business credit products are
subject to appropriate underwriting
procedures and monitoring, andgoverned by relevant Group-level andentity-level risk committees.

Principal Risks and Uncertainties

Emerging Risks

Mitigants and Controls

OutlookConduct: Conduct and Culture Risk
Revolut’s exposure to financial institutions
is expected to evolve over time withplans to grow a high-quality liquid asset
portfolio to support compliance withregulatory large exposure requirements.

Revolut has Conduct Risks associated with

Revolut

and

Revolut has a low tolerance for risks that

customer outcomes, market stability andCulture Risk through its Enterprise Risk

mitigates

Conduct

may harm consumers or compromise its

effective competition; and Culture Risks

Management Framework. This includes

regulatory obligations. Our primary goal is toassociated with business practices andkey controls, processes and governanceprotect consumers and enhance trust in our

incentives.

oversight.

products and services.

Revolut intends to continue scaling up its
product offering for retail and businesscustomers in a controlled manner, which
will result in growth in retail and businesscredit exposure during the coming year.

Revolut is committed to putting consumers

Consistently with its Enterprise Risk

Revolut has observed an increase in theat the heart of the business and delivering

Management

Revolut

inherent risks associated with Conduct

to them good outcomes. This applies acrossdesigns products and services thatand Culture Risk, directly aligned to theall stages of the consumer journey, including

meet the needs of consumers within the

expansion of products, services, jurisdictions

products and services, communications

respective target markets, and deliverand volume of customers. This continues toand post-sale support.

them with value; provides consumers

be mitigated through the Enterprise Riskwith clear, understandable information

Management Framework.

Framework,that supports them to make informed
decisions; and provides accessible inapp support that ensures our customers
are able to realise the full benefits ofproducts. There are additional controls toensure individuals with characteristics ofvulnerability do not suffer poor outcomes,
or worse outcomes than any other groupin the target market.
Clear roles, responsibilities and oversightarrangements are defined at operationaland organisation levels, as well asmechanisms to incentivise good businesspractices.
Finally, governance is exercised throughthe Compliance, Operational & Conduct
Risk Committee, with clear escalation lines
to the Group Executive Risk Committee &Board Risk & Compliance Committee.

Compliance: Regulatory Risk
Revolut is committed to complying with

Revolut

Risk

Revolut seeks to operate within all relevant

the relevant regulatory requirements in thethrough its Enterprise Risk Management

mitigates

Regulatory

laws and regulations and establish strong

jurisdictions in which it operates and to

Framework. Regulatory Risk management

working relationships with regulators.

provide accurate, reliable and timely reports

is enhanced by comprehensive policies

to external stakeholders, authorities andand procedures underpinned by an

Regulatory requirements may be complex

regulators.

extensive mandatory training programme.

and require careful interpretation, including
consideration of their underlying spirit andGovernance is exercised through theintent. We are committed to complying with

Compliance, Operational & Conduct Risk

applicable laws, rules and regulations andCommittee, with clear escalation lines tomonitoring for changes to the regulatory

the Group Executive Risk Committee andlandscapes and maintaining robust systems

Board Risk & Compliance Committee.

and controls.

Revolut has a well-established horizon
scanning process to detect early signs ofimportant regulatory, legislative and policy
developments and/or changes. Revolut
actively

contributes

toconsultation

papers issued by regulators.

Revolut Annual Report 2022

52

Revolut Annual Report 2022

53

Strategic Report

Risk Management and Compliance

Principal Risk

Principal Risks and Uncertainties

Emerging Risks

Mitigants and Controls

Strategic Report

Outlook

Risk Management and Compliance

Principal Risk

Operational: Financial Crime Risk
Financial Crime Risk is the risk of failingto effectively mitigate criminal or illegal
activity through Revolut’s products andservices, third parties and employees. This
includes money laundering, violations ofsanctions, bribery and corruption, fraud,
tax evasion, and terrorist and proliferation
financing.
Revolut may be adversely impacted if it
fails to appropriately identify and mitigate
the risk that employees or third parties
facilitate, or that Revout’s products andservices are used to facilitate financial
crime.
Non-compliance
may
lead
to
enforcement action including fines,
public censure, suspensions, restrictions,conditions, limitations and disciplinary
prohibitions, which could result in amaterial financial and reputational impact
to the business.

Revolut takes its responsibility toprevent and detect financial crime
seriously. Revolut mitigates these risks
by ensuring it has robust governance,
effective risk management procedures
and a strong control framework to
manage Financial Crime Risk.
We
continuetoimprovetheeffectiveness of our financial crime
systems and controls, including realtime monitoring of transactions, daily
screening of all customers for sanctions
and adverse media, and enhanced staff
mandatory training on Financial Crime
Risk.
Revolut continues to invest significant
attention and resources to strengthen
the overall financial crime framework,
systems and controls.

In particular, Revolut focuses on
managing the risk that customers are
victims of Account Takeover Fraud,
Authorised Push Payments Fraud, andlost or stolen Card Fraud.
Revolut is committed to comply with therelevant regulatory requirements andrecommendations; furthermore, failingto be compliant may lead to enforcement
action including fines, public censure,suspensions, restrictions, conditions,limitations and disciplinary prohibitions.

Revolut Annual Report 2022

Revolut aims to minimise External
Fraud Risk by maintaining robust, riskbased, systems and controls which aredesigned to meet prevailing legislativeand regulatory requirements and to
deter, prevent, identify, manage andreport occurrences of External Fraud.
Where fraud does occur, Revolut hasa policy of investigating all events inorder to learn and take the necessary
steps to further strengthen its systems
and controls, therefore protecting
Revolut and its customers from future
fraud risk(s) and to protect Revolut’s
reputation.

Emerging Risks

Mitigants and Controls

Outlook

Operational: Third Party Risk
Financial institutions remain undersignificant regulatory scrutiny regarding
their ability to prevent and detect financial
crime. As Revolut continues to expand
into new jurisdictions, products andservices, this increases and introduces
new risks that require continued focus to
manage Financial Crime Risks effectively.

Revolut relies on third parties andoutsourcing service providers across anumber of channels, including payment
processing,regulatorycompliance,
foreign and crypto exchange, trading
services, Know Your Customer (KYC)/
Anti-Money Laundering (AML) and otherbusiness services.

Changes concerning virtual assets,
particularly with regards to the scope of
regulation and an increasing focus on
customer harm linked to these assets,continues to be an area of significant
focus and speed of change.

A significant portion of the services
provided to Revolut customers depend on
third-party arrangements. Consequently,
this presents operational and sometimes,
concentration risk, for which we havea defined risk appetite and monitoringprocedures.

Revolut continues to evaluate, monitor
and strengthen the effectiveness of
its Financial Crime framework and iscommitted to maintaining a risk andcontrol environment that enables it torespond promptly and effectively toemerging financial crime threats.

Operational: External Fraud Risk
Revolut defines External Fraud risk as
losses due to acts of a type intended
to defraud, or misappropriate property
or circumvent the law, by a third party.
Significant External Fraud Risks for
Revolut include Acquiring Fraud, Issuing
Fraud (Card / Payment / Lending),
Account Takeover Fraud and Application
Fraud (Identity Fraud). Revolut has a low
appetite for External Fraud Risk.

Principal Risks and Uncertainties

Revolut continues to evaluate, monitor
and strengthen the effectiveness of
its External Fraud Framework and iscommitted to maintaining a risk andcontrol environment that enables it torespond promptly and effectively to any
emerging fraud threats and advanced
technology.
Revolut is increasing its engagement withpeer financial institutions and industry
bodies, which will enable it to respond
more promptly to emerging risks andwork collaboratively to proactively protect
its customers.

Revolut mitigates this risk throughits Third Party and Outsourcing risk
management framework. This includes
vendor due diligence and ongoing
monitoring of outsourced services,
Service
Level
Agreements
andcontingency planning efforts. We work
closely with third parties to ensure weare resilient and can continue to deliver
our services with minimal disruption.
We
continue
toreduceourdependencies on third parties via
diversification and building products
and processes in-house wherepractical.

Material third party relationships are
subject to governance; and regular
updates on third party concentrations
continue to be conducted and reported to
management. We are actively managing
significant concentration risk with third
parties through diversifying our suppliersof third party services and by building
solutions to a number of key processes
in-house.

Furthermore, a number of our outsourcing
providers rely on a large number of theirstaff with dedicated training required tosupport Revolut services.

Operational: Cyber and Data Security Risk
As a global financial provider, cybersecurity threats which might attempt toaccess Revolut systems or customer andpayment data are a significant risk.
Revolut handles significant amounts ofpersonal data provided by its customers,
as well as employee data and confidential
corporate information, and must comply
with strict data protection and privacy
laws and regulations in global jurisdictions
in which it operates, while protecting its
own reputation and corporate position.
The top Cyber and Data Security
Risks that Revolut is focussed on are
unauthorised access to Revolut's dataand systems and the risk of inadequate
processes around data privacy.

Alongside the advanced security
features it provides to customers,
Revolut has implemented technicaland organisational controls to reduce
Cyber and Data Security Risks. These
include dedicated internal teamled application security testing,vulnerability management, a companywide training and phishing threat
simulation programme, logical access
controls, advanced endpoint threatprotection, a dedicated cyber threat
intelligence team, monitoring andalerting across our key infrastructureand systems, security due diligenceand monitoring of third parties as well
as regular external penetration testing
and audits.

The US fraud, referenced previously,
was entirely specific to the US, as the
only region supporting the type of
payment that was exploited. The issue
enabling the fraud was resolved upon
identification and the subsequent
review resulted in several control
enhancements.

Revolut also implements industryleading security features into its
customer offerings, including locationbased card security features and
3D Secure push notifications andcontextual multi-factor authentication,
to ensure that customers can trust theservice provided.

In addition, the group is mitigating thespecific top risks through mandatory
training for all employees and specific
KRIs to identify trends in fraud events.

Revolut continues to invest in its digitalplatforms and security posture, andbuilds resilient and secure technologies
and processes to minimise the risk ofdata security breaches.
54

We expect our network of third parties
to continue to grow as a result of ourbusiness growth, so we continue toclosely monitor this risk.

Revolut Annual Report 2022

As a cloud-based fully digital company,
Revolut operates a hybrid working model,
with many employees operating fully
remotely. The cyber risks that follow a
remote-working model, an innovative
digital and growing company, alongwith the continuing opportunism andmotivation of criminals, continue to beclosely monitored with additional controls
implemented for customer, staff and dataprotection.
Revolut
operatesacontinuous
improvement approach to security
controls, adapting to the threat landscapeas it evolves, and as a result of on-going
testing and audit activities.
Revolut will continue to mature its
governance in this area and look to alignto external Information Security standards(e.g. SOC2) to provide assurance on
Revolut’s
controlenvironment
forcustomers, partners and vendors utilising
Revolut’s services.

55

Strategic Report

Risk Management and Compliance

Principal Risk

Principal Risks and Uncertainties

Emerging Risks

Mitigants and Controls

Strategic Report

Risk Management and Compliance

Emerging Risks

Outlook

Operational: Availability and Continuity Risk
Operational Resilience is an outcome
which Revolut strives to achieve byeffectively managing its Availability
and Continuity Risk and responding
to operational disruptions in a timely
manner. Operational disruptions canhave many causes including, for example,
technology failures or when making
changes to systems. Some disruptions
may also be caused by matters outsideof a firm’s control, such as a cyber-attack
or wider telecommunications or power
failure.
Operational disruptions always remaina risk. However, as Revolut continues
to grow, launching new products andentering new markets, the risk of an
operational disruption occurring is likely
to increase. As our customer base grows,
the potential impacts may also increase.
Maintaining
Operational
Resilienceis important for Revolut to protect its
customers, and achieve its growth goals.

Revolut operates an Operational
Resilience Framework which sets out
the policy, procedures and governancestructures to enable us to monitor
and manage the resiliency of ourmost Important Business Services forcustomers.
The Operational Resilience Framework
is formed of nine capability pillars, which
cover a variety of potential sources ofoperational disruption and support us
in defining ‘resilience practices’ undereach pillar.
Revolut maintains a suite of BusinessContinuity Plans and Disaster Recovery
Plans,
which
containrecoverymeasures for business processes andtechnology to enable services to beresumed within a timely manner. These
plans are tested regularly to ensure
they remain fit for purpose.

Our Operational Resilience Framework
has identified our most Important
Business Services for customers, andset tolerance limits for their disruption
in a major incident. We will continuallywork to enhance the resiliency of theseimportant services, by investing in
additional technology, people and third
party resources.

Principal Risks and Uncertainties

Emerging Risks

Whilst we monitor the environment for key risks emerging, we would like to call out
the following risks in this year’s report. These are risks which we are paying particularattention to and are developing concrete plans to integrate into our daily risk andcontrol registers (or amend existing entries where relevant).

Risk

Perspectives

Climate Risk

Revolut’s exposure to the financial risks arising from climate change is currently immaterial. Our small number ofoffices are not especially exposed to physical risk. Revolut does not undertake lending activities collateralised withphysical assets or provide funding that generates financed emissions. We expect to develop some limited climate
risk as Revolut’s business model evolves and have put in place governance and metrics to track this.

The aim of this is to limit the likelihood ofa major disruption occurring, and also tolimit the harm to customers and Revolutshould a disruption impact the Group.
We operate a robust testing regime tomonitor the effectiveness of our resiliency
measures across the Group.

In particular, we anticipate the possibility of Revolut developing exposure to climate risk through its lending book andinvestment operations, and will enhance risk management capabilities (including dedicated climate stress testing)accordingly.

Given the longer-term nature of the risk and Revolut’s desire to set and achieve appropriate climate goals, wecurrently manage climate risk as an emerging risk with the expectation that it will become one of our key strategicrisks as our exposure begins to grow.

Evolving Technology

The regulatory environment surrounding emerging technologies such as Artificial Intelligence (‘AI’) and crypto is
continuously and rapidly evolving.

Recognising Revolut’s strategic objectives, we constantly monitor regulatory change across all jurisdictions in which
Revolut operates.

A dedicated Operational Resiliencecapability is in place to maintainoversight of the framework across theGroup and local entities.

This includes assessing any emerging legislative and regulatory change promptly, to ensure that Revolut is able
to identify any impact to the way in which we provide the technology within our products and services to ourcustomers to ensure we remain in compliance with any requirements as they may become applicable.

New technologies provide substantial upside to Revolut, however there is also a risk that technologies such as AI could
create an opportunity to bypass or manipulate existing anti-fraud and other controls

Revolut Annual Report 2022

56

Revolut Annual Report 2022

57

Board of Directors

BOARD OFDIRECTORS

Martin Gilbert

The Board of Directors is responsible for setting the overall strategy and culture of
the Company and Group, and for overseeing management in its day-to-day runningof the business. The Board is responsible for ensuring the company has in-place
governance arrangements appropriate for the size and nature of its business

Nik Storonsky

Chair

CEO & Co-Founder

Vlad Yatsenko
CTO & Co-FounderMichael Sherwood
Independent Non-Executive Director, ChairGroup Remuneration Committee

Experience: Martin Gilbert co-founded Aberdeen Asset Management in
1983, leading the company for 34 years and overseeing its 2017 merger withStandard Life. Until November 2019, he was chairman of the UK’s Prudential
Regulation Authority’s Practitioner Panel and was Deputy Chairman of theBoard of Sky plc until 2018. Before this, he was the Chairman of FirstGroup.
In 2015, he was ranked no. 22 in the Harvard Business Review’s 900 bestperforming CEOs in the world. Martin holds an LLB from the University ofAberdeen and an MA in Accountancy. He qualified as a chartered accountant
with Deloitte.

Experience: Nik Storonsky launched Revolut in 2015 to transform the way
we spend and transfer money abroad. Since then, he has put Revolut on
the path of simplifying all things money. Before founding Revolut he was an
emerging markets equity derivatives trader at Credit Suisse and Lehman
Brothers, where he traded more than $2 billion across various options, swaps
and foreign exchange instruments. Nik holds an MS in Applied Physics andMathematics from the Moscow Institute of Physics and Technology and an
MA in Economics from the New Economic School, Moscow.

Experience: Vlad Yatsenko co-founded Revolut with Nik Storonsky in 2015
and is its Chief Technology Officer. His software engineering experiencespans industries including travel and finance and includes creating realtime billing systems at Comarch and booking engines for Sabre Airline
Solutions. Having built financial software systems at tier one investmentbanks including UBS, Deutsche Bank and Credit Suisse, he realised that todeliver a next-generation digital banking service he would need to build it
himself. He holds an MS in Computer Science from the National University of
Kyiv-Mohyla Academy.

Experience: Michael Sherwood retired as Vice Chairman of Goldman Sachs
and Co-Chief Executive Officer of Goldman Sachs International in 2016, after
31 years with the company and 22 years as a partner. He was a founding
sponsor of Harefield Academy and a member of the Westminster Abbey
Development Board. He is a former Trustee of the Mayor’s Fund for London
and the Serpentine Galleries.
Current External Appointments: Michael is a Board Member of Moscot
Inc and of Credit Benchmark Limited and a Trustee of Greenhouse
Sports Limited.

Experience: Caroline Britton was at Deloitte LLP for 30 years until 2018 and
was an audit partner for 18 years. Caroline holds an MA in Economics fromthe University of Cambridge. She is a fellow of the Institute of Chartered
Accountants of England and Wales.

Caroline Britton

Independent Non-Executive Director, ChairGroup Audit Committee

Revolut Annual Report 2022

58

Revolut Annual Report 2022

Current External Appointments: Caroline is a Non-Executive Director andChair of the Audit Committee at both MoneySupermarket.com Group plc
and Sirius Real Estate Limited. She is also a member of the Audit, FinanceRisk and Investment Committee for Make-A-Wish Foundation International,
and a Trustee and Chair of the Audit and Risk committee at the Royal
Opera House.
59

Board of Directors

Ian Wilson

Independent Non-Executive Director

John Sievwright

Independent Non-Executive Director, Chair,Group Risk & Compliance Committee

Experience: Ian Wilson spent much of his career with Royal Bank of
Scotland, latterly as Director of Credit, Retail Banking. Later executive roles
included Managing Director of Business Banking at Santander UK, Chief
Risk Officer for GE Money UK, Tesco Bank, Charter Court Financial Services(also Executive Director), and Monzo Bank and Strategic Risk Director for
Virgin Money. He is a chartered banker, a fellow and former Vice Presidentof the Chartered Banker Institute in Scotland and a fellow of the Institute of
Financial Services.

DIRECTORS’REPORT

Experience: John Sievwright had a 20-year career with Merrill Lynch holding
global leadership positions, latterly Chief Operating Officer - International.
He earlier worked in finance and accounting roles at Bankers Trust and Bankof Tokyo International, having begun his career as an auditor at Ernst &Young where he qualified as a Chartered Accountant. While at Merrill Lynch,
he was President of the Futures Industry Association. He is a former Senior
Independent Director (SID) and Chairman of the Audit and Risk Committee
at ICAP plc (later NEX Group) and former SID and Chairman of the Audit
Committee of FirstGroup plc. He has an MA in Accountancy and Economics
from the University of Aberdeen.

The Directors present their report and the audited financial statements of the Groupand Company for the year ended 31 December 2022.

Current External Appointments: John has been a Director of Burford
Capital Limited since May 2020 and serves on its Audit and Compensation
Committees.

Experience: Dan Teodosiu has over 30 years of experience in building andmanaging engineering and research teams, scaling platforms, as well as
developing infrastructure capable of supporting billions of users. During
this time, he has held senior positions at Google, Microsoft and HP Labs.
Most recently, Dan acted as CTO of Onfido and, prior to that, as CTO of
Criteo, Europe’s largest ad tech company.

Dan Teodosiu

Independent Non-Executive Director

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Directors’ Report

Political Donations

Directors’ Report

The Board’s primary responsibility is to promote the long-term
success of the Revolut Group. The Group Board discharges
this responsibility by overseeing Revolut’s management
team, to whom the Board delegate the day-to day-running of
the business and who report to the Board at regular intervals.

Matters Covered in the Strategic Report
The Directors have addressed the following matters in therelevant sections of the Strategic Report:

Corporate Governance

Board Committees

Executive Sub-Committees

Culture and People

Directors' Liabilities

Corporate
Governance
Legal Entity Structure and Group Reorganisation

Area

Section

Page number

Review of the business performance

Business Performance

24

Strategy and future developments

Our Business Model and Strategy

28

Engagement with suppliers
Engagement with customers
Engagement with employees

Engaging with Stakeholders

Employing people with disabilities

Our People

37

Principal risks and uncertainties

Risk Management and Compliance

43

Political Donations

Revolut operates an efficient legal entity structure. The legal
entity structure evolved during 2022, most notably with theinsertion of Revolut Group Holdings Ltd as the ultimate parent
entity in the Group. Revolut Group Holdings Ltd is 100% direct
shareholder of Revolut Ltd, our previous Group top company.

30

In addition, in July 2022, we completed the successful mergerof our Lithuanian e-money institution, Revolut Payments UAB,
with our Lithuanian bank, Revolut Bank UAB. As a result of themerger, all of our e-money institution customers across the
EEA became customers of Revolut Bank UAB, which has a fullbanking licence granted by the European Central Bank and issupervised by the Bank of Lithuania.

The Group has not made any political donations to, nor incurred
any political expenses in relation to, any registered politicalparties, organisations or candidates.

Revolut Group Board of Directors
Corporate Governance Standards
Revolut operates in accordance with all corporate
governance, legal and regulatory requirements. In addition,
while not subject to the UK Corporate Governance Code 2018(the CG Code), on the basis that this is industry best practice
Revolut applies the spirit of the CG Code Principles within its
Corporate Governance Framework.
In the remainder of this section, we set out how Revolut
implements these requirements and best practice principles
in practice.

Group Corporate Governance Framework
The Group Board is ultimately responsible for the Group’s
corporate governance arrangements, policies andpractices. In June 2023, the Board approved an updated
Revolut Corporate Governance Framework (RCGF). The
RCGF details the Group’s governance and internal control
framework, including, but not limited to, the Group’s: (i) board,committee and sub-committee structures, (ii) corporate
structure (including all entities and branches); (iii) decisionmaking processes; (iv) Three Lines of Defence model; and(v) subsidiary governance framework. The RCGF acts as theoverarching Group guide on governance.

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62

Revolut Annual Report 2022

The Board is chaired by Mr Martin Gilbert, who has acted
as Revolut chair since 2020. Mr Gilbert facilitates open andconstructive discussion between executive management
and Board members at regularly held Board meetings.
The Board exercises independence in the discharge ofits duties in overseeing management, providing effective
and constructive challenge to the Executive Management
during Board meetings, and monitoring and overseeing theimplementation by management of key initiatives.
There is a clear division of responsibilities between theleadership of the Board and the executive leadership of theCompany’s business, which is led by Mr Nik Storonsky as theGroup CEO.
No changes were made to the Board composition during2022. Profiles for each of the current Board members are set
out in the Board of Directors section, including Dan Teodosiu(who was appointed to the Board in November 2023).
The Board performs an annual self-assessment of theindividual and collective skills of the Board. The findingsof these self-assessments are used to inform the Board’s
Succession Plan and Board Training Programme, which help
to ensure that the Board is both stable and resilient in the longterm and that the Board possesses an appropriate balanceof skills, knowledge and experience to collectively lead theGroup, both now and into the future.

63

Directors’ Report

Corporate Governance

Board Committees

Executive Sub-Committees

Culture and People

Directors' Liabilities

Directors’ Report

Time Commitment

Group Board Meeting Arrangements and Reporting

Independent Non-Executive Directors are required to devote
to the Company such time as is necessary for them todischarge their duties in an effective manner. The minimum
time commitment for Independent Non-Executive Directors
is 36 days per annum. This time includes time spent preparing
for and attending meetings of the Board and its Committees,
as well as time for each director’s ongoing professional
development. Revolut’s Independent Non-Executive Directors
dedicate significant commitment and time to the Company,
which is of tremendous value and benefit to the organisation.

The agenda for the Group Board is driven by the Chair,with support from the Group CEO, Company Secretary andwider Governance team. Ahead of each calendar year, theforward-looking agenda for the year is set. This provides aclear roadmap for the key strategic, financial, operational andrisk matters on which the Board expects to be reported to bymanagement. This enables the Board to have oversight of theperformance of the Group against expectations.

Effectiveness Reviews
Each year, the skills, performance and effectiveness of theBoard and the Board Committees are assessed, in order
to identify the Board's strengths and development areas.
Every three years, the Board instructs an independent firm
to conduct this evaluation. An independent evaluation of theGroup Board was conducted during the fourth quarter of 2022.
The Chair, Mr Martin Gilbert, oversees the implementationof recommendations identified in the evaluations. The next
independent evaluation is scheduled for 2025. Internal
evaluations will be carried out annually in the interim.

Corporate Governance

Board Committees

Board Committees

Executive Sub-Committees

Culture and People

Directors' Liabilities

The Board maintains effective oversight of the Group through Committees, which were
established to assist the Board in discharging its duties. The Board has establishedfour Committees: (i) Board Risk & Compliance Committee; (ii) Board Audit Committee;(iii) Nomination Committee; and (iv) Remuneration Committee. The Committees
operate under delegated authority from the Group Board, in each case as definedin the respective Committee’s Terms of Reference. The Committee Chairs provide
a high-level overview of Committee discussions at each scheduled meeting of
the Board.

Throughout the Board and Committee meeting deliberations,
the Board considers the views and interests of Revolut’s
stakeholders such as customers, employees, shareholders
and regulators.
Meetings of the Group Board are held at intervals of aroundsix weeks, or convened ad hoc as required. In 2022, there
were 15 meetings of the Group Board convened, of which six
were ad hoc.

This diagram is not exhaustive. Additional Executive Sub-Committees exist to consider
specialist topics, as required.
The table below shows the number of meetings held in 2022 by the Board of Directors
and its Committees, along with the attendance of the individual Board members(this list does not include Dan Teodosiu, as he was not a Board member in 2022):

Board

BAC

BRCC

NomCo

RomCo

Total number of meetings

15

9

9

8

14

Martin Gilbert

15

9

8

8

14

Nik Storonsky

14

—

—

8

—

Vlad Yatsenko

14

—

—

—

—

Michael Sherwood

13

8

8

8

14

Caroline Britton

15

9

9

—

13

Ian Wilson

13

9

9

—

13

John Sievwright

14

9

9

—

14

Successfully completed merger of our
Lithuanian e-money institution, Revolut
Payments UAB, with our Lithuanianbank, Revolut Bank UAB

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Directors’ Report

Corporate Governance

Board Committees

Group Board Risk & Compliance Committee
The Group Board Risk & Compliance Committee is responsible
for supporting the Board in fulfilling its duties with regards torisk and compliance management, which includes, but is not
limited to, the following:⚫ Review and recommend the Group’s Enterprise Risk
Management Framework (ERMF) and Risk Appetite
Statement (RAS) to the Board for approval, and monitor
the Group’s performance against the ERMF and Risk
Appetite profile.
⚫ Approve the Board-level policies where relevant.
⚫ Review matters pertaining to the Group’s material
and emerging risks, which includes a strong control
environment.

Executive Sub-Committees

Culture and People

Directors' Liabilities

Directors’ Report⚫ Review matters such as the capital and liquidity positionsof the Group.
⚫ Review and recommend to the Board the Group’s
Recovery plan and Wind-down Plan.
⚫ Review matters pertaining to stress testing activity
and any corrective actions stemming from regulatory
engagements.

Corporate Governance

Board Committees

Culture and People

Directors' Liabilities

Group Nominations Committee

Group Remuneration Committee

The Group Nominations Committee is responsible forsupporting the Board in fulfilling its duties with regards tothe assessment, selection and nomination of candidates for
Board and Executive Management positions, which includes,
but is not limited to, the following:

The Group Remuneration Committee is responsible forsupporting the Board in fulfilling its duties with regards to the
remuneration arrangements for the Group and for ensuringthat they align with the Group's business strategy and risk
strategy in terms of incentivisation. This includes, but is not
limited to, the following:⚫ Advise the Remuneration Committee on whether the
proposed incentive and remuneration plans are consistent
with risk and control objectives.

⚫ Reviewing the structure, size, composition andindependence of the Board and making recommendations
with regard to any changes it considers necessary.

⚫ Ensure the Group maintains an open and transparent
dialogue with its regulators and governmental bodies.

⚫ Overseeing the succession planning process for the
Board and Executive Management positions.

⚫ Consider external advice and/or assurance on Risk andCompliance matters where appropriate.

⚫ Ensuring that a Board appointment procedure isestablished, which includes the completion of robust due
diligence to assess candidates considered for nomination.
⚫ Approving
Director
subsidiaries.

⚫ Support the promotion of a strong Risk and Complianceculture and awareness throughout the organisation.

Executive Sub-Committees

appointments

toregulated⚫ Setting the remuneration for the top 25 highest paid
employees, those performing Control Functions andMaterial Risk Takers.
⚫ Establishing the Group’s Remuneration Policy, ensuringthat it is benchmarked appropriately.
⚫ Overseeing any major changes in employee benefits
structures.
⚫ Reviewing the design of share incentive plans for approvalby the Board and shareholders.

Group Board Audit Committee
The Group Board Audit Committee is responsible forsupporting the Board in fulfilling its duties with regards tooversight of prudential, financial and audit matters which
includes, but is not limited to, the following:⚫ Monitoring the integrity of the Group’s financial statements
and disclosures.
⚫ Reviewing the effectiveness of the Group’s internal systemof financial controls.
⚫ Monitoring the performance and independence of theInternal Audit function.
⚫ Overseeing and leading the engagement with the Group’s
external auditor.
⚫ Reviewing the whistleblowing arrangements by which
staff may raise concerns about possible improprieties.

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Directors’ Report

Corporate Governance

Executive
Sub-Committees

Board Committees

Executive Sub-Committees

Culture and People

Directors' Liabilities

Directors’ Report

Corporate Governance

Board Committees

Executive Committee

Assets and Liability Committee

The Board delegates authority for the day-to-day management of the Group to theGroup CEO. The Group CEO is supported by an Executive Committee, operating underdelegated authority from the Board.

The Board delegates authority for the day-to-day financial
asset and liability management of the Group to the Group
CFO and/or Head of Treasury. The Group CFO and/or Head ofTreasury are supported by an Asset and Liability Committee(ALCO), operated under delegated authority from the Group
Risk & Compliance Committee who are responsible for thefollowing:

The Group Executive Committee, or 'ExCo', is comprised of key members of senior
management including the Group CEO, Group CTO, Group CRO, Group GC and Group
CFO, as well as representatives from other areas of the Company including productand control departments.
The ExCo is responsible for developing the strategy for Board approval andoverseeing its execution, monitoring the Group’s financial position and performance,and overseeing the Group’s progress against its goals and approved annual budget.
More specifically, the ExCo’s purpose is to:⚫ Management and optimisation of the balance sheet and
the Group’s financial asset investments in line with Board
approved appetite.

Executive Sub-Committees

Culture and People

Directors' Liabilities⚫ Reviewing and monitoring the Risk Appetite Statements(RAS) with respect to financial risks.
⚫ Reviewing and monitoring the liquidity risk profile of theGroup.
⚫ Reviewing the credit risk and market risk limit utilisations.
⚫ Reviewing and approving interest rate risk limits andutilisations.
⚫ Reviewing and approving assets and liability management
risk frameworks and policies.
⚫ Reviewing and approving capital and assets and liability
management strategies.

⚫ Reviewing and monitoring the controls in relation tosafeguarding obligations.

⚫ Reviewing and approving liquidity transfer pricing andcapital allocation frameworks and policies.

⚫ Reviewing and monitoring the capital (ICAAP) and liquidity(ILAAP) adequacy of the Group.

⚫ Reviewing and approving forward-looking capitalisationand funding plans.

⚫ Reviewing Contingency Funding Plans (CFP) and recovery
and resolution plans.

⚫ Reviewing and approving future business plans withrespect to capital adequacy and liquidity risk profile.

Culture and People

Executive Risk Committee

Revolut's success is based on our people and culture —diverse, performance-driven and deeply collaborative. With apersistent ambition balanced by a commitment to thoroughanalysis, we are developing best-in-class processes inregulatory compliance, internal controls, and robust risk
management frameworks to continually deliver outstanding
products, driving value for our customers, shareholders andthe broader community.

The Board delegates authority for the day-to-day risk and compliance managementof the Group to the Group Chief Risk Officer. The Group Chief Risk Officer is supportedby the Group Executive Risk Committee (GERC), operating under delegated authority
from the Board Risk & Compliance Committee. Main responsibilities involve, but are
not limited to:

We place a lot of importance on the hiring process, ensuring
we hire and retain employees of the highest calibre andintegrity, with values consistent with Revolut's. Our company
values, detailed on our website at www.revolut.com/ourculture, lay the groundwork for this culture.

⚫ Monitoring the risk profile of the Group against the Board Risk Appetite Statement(RAS), reviewing and approving mitigation plans in case of any breaches.

The Revolut Board ensures that a strong and healthy corporate
culture cascades from the top down, enabling Revolut toexcel in the highly regulated environment in which it operates.

⚫ Support the CEO to make key decisions for the Group.
⚫ Review progress on agreed priorities (goals and roadmaps) and align executives inclearing blockers for key priorities of the Group.
⚫ Ensure consistent communication across the Group of strategy, priorities,
and actions.
⚫ Recommend matters to the Group Board for approval.
The ExCo provides advice and guidance to the CEO, who makes the key decisions
regarding the firm’s strategy and the execution of key priorities.
The ExCo meets weekly or more often as required.

⚫ Setting, allocating and periodically reviewing limits and controls that aresupplementary to the Board RAS and help managing risks on a more granular level.

Refer to the Our People section on page 37 for more details.

⚫ Reviewing and monitoring the implementation of the ERMF across Revolut.
⚫ Evaluating the risk and compliance awareness and maturity of each department
or risk-taking unit.
⚫ Monitoring the timely closure of risk, control and compliance issues.
⚫ Considering and approving proposed changes to Executive management policies
and reviewing policies for the Board's approval.
⚫ Exercising oversight with regard to risk assessments and risk management ofchange activities that impact cross-functional areas.
⚫ Reviewing and deciding on matters escalated from the ERC sub-committees or
Revolut's subsidiaries' risk function.
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Directors’ Report

Corporate Governance

Culture and People

Directors’ Liabilities

Research and Development

Financial Instruments

Directors’ Report

Directors’ Liabilities

Revolut indemnifies Company directors against third party liability, subject to theconditions set out in section 234 of the Companies Act 2006. This qualifying third
party indemnity provision was in force during the 2022 financial year.

Research andDevelopment

The Group undertakes research and development activities in respect of thedevelopment and enhancement of its technology platform. Revolut incurred researchand development costs during 2022 of £88.0 million and these are recognised in thestatement of comprehensive income (2021: £58.7 million).

Financial Instruments

The Group enters into a series of financial instruments for the purposes of its business
operation, comprising cash and cash equivalent, Financial investments hold-to-collectand Financial investments hold to collect and sell, Derivatives, Loans and advances
to customers, customer liabilities, and other payables and receivables measured atamortised cost. Details of the Group’s financial instruments are set out in Note 28 of
the financial statements.

Corporate Governance

Licences andAuthorisations

Directors’ Liabilities

Research and Development

Financial Instruments

Licences and Authorisations

In the UK, Revolut Ltd is an e-money institution. Revolut Ltd offers its UK customers
e-money services and is authorised to do so through its e-money licence,
which is issued by the FCA. Revolut's UK banking licence application to the PRA
remains ongoing.
During 2022, Revolut Payments UAB and Revolut Bank UAB merged into a single
combined entity, Revolut Bank UAB. Revolut’s banking / payments EEA customers
are now customers of Revolut Bank UAB and its branches, with the exception of
crypto services, which are provided by Revolut Ltd and RT Digital Securities Cyprus
Ltd; insurance services, provided by Revolut Insurance Europe UAB; and investment
services, provided by Revolut Securities Europe UAB ('RSEUAB'). RSEUAB also received
approval in January 2022 from the Bank of Lithuania (BoL) to extend the investment
services provided to customers across the EEA on a freedom to provide services(FoS) basis.
In 2022, Revolut Bank UAB consumer credit FOS passporting was granted in France,
Germany and Spain.
Revolut Bank UAB has also been granted bank branch passporting approvals, under
freedom of establishment (FoE), to establish local branches in Belgium, France,
Germany, Hungary, Ireland, Italy, Netherlands, Portugal, Romania and Spain. Ireland,
France and Spain are currently live, while the remaining are in the process of being
operationalised.

The Group is exposed to foreign exchange and interest rate risk. The Group undertakes
fair-value hedge accounting using interest rate swaps for its non-interest-bearing
core deposits. Details of the Group’s Hedge Accounting are set out in Note 28.5 of thefinancial statements.
The Group’s financial risk management objectives and policies are set out in the Risk
Management section of the Strategic Report, along with the Group’s exposure tocredit risk, liquidity risk, market risk and cash flow risk.

Revolut has obtained a number of other regulatory permissions across the globe so
as to be able to operate in different countries and work towards achieving Revolut’s
long-term goal of becoming an international, multi-currency exchange and electronic
payments processing bank.
In 2022, Revolut received the following licences:

Revolut scores an industry- leading
average user review of 4.3/5 on
the consumer business review
site Trustpilot.

Licence TypeCountry

Trading

Australia

CryptoCyprus, Spain (Revolut Ltd), Singapore, UK

CreditAustralia

Insurance

Lithuania

Payments (Money Transmitter)

MexicoCRD V Financial Holding Registration

Lithuania

The Group also has a number of subsidiaries which are regulated and provide similar services in non-UK and non-EEA jurisdictions.
Full details are listed in the notes to the consolidated financial statements.

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Directors’ Report

Corporate Governance

Post Balance
Sheet Events

Post Balance Sheet Events

Branches Outside the UK

Going Concern

Directors’ Report

Licences and Authorisations

Corporate Governance

Revolut Bank UAB e-money passporting for its branches, under freedom of
establishment (FoE), was granted in Belgium, France, Germany, Hungary, Ireland,
Netherlands, Portugal, Romania and Spain.

As part of the going concern review, the Directors have considered the same severe,
but plausible, downside scenarios as used in the Group's detailed ICAAP and ILAAP
to stress-test the viability of the business. The scenarios tested are shared below
and were tested before and after actions from Group management. The table
includes the principal risks being stressed as described in the Risk Management &Compliance section.

In 2023, Revolut received the following licences:

CryptoItaly, Spain (RT Digital Securities Cyprus Ltd)

Investment Advisor

US

CreditBrazilPayments

India (licence renewal)

Disclosure of Information to the Auditor

The going concern assessment is based on the detailed forecast prepared bymanagement. In the base case, appropriate assumptions have been made in
respect to user growth, revenue growth and profitability, based on the historicalperformance of the business and expected changes to the business over theforecast period.

Revolut Securities Europe UAB (RSEUAB) investment services passporting was
granted to passport services across the EEA. RSEUAB became operational in March2023 upon launching its activities in the EEA.

Country

Directors' Responsibilities Statement

The consolidated financial statements are prepared on a going concern basis as the
Directors are satisfied that the Group and the Company have the available resources
to continue in business for a period of at least twelve months from the date of approvalof the financial statements.

Going Concern

In 2023, Revolut Bank UAB credit passporting was granted in Italy and Portugal.

Licence Type

Going Concern

Type

Scenario

Description• In this scenario, a global stock market crash results in a sharp rise inInterest rates
decrease

Liquidity facility
In April 2023, Revolut entered into a £75.0 million liquidity facility with an external
lender to provide diversification in funding as the business grows globally. Security
was provided to the lender in the form of a debenture. The facility remains undrawn
and there are no plans to draw upon it.

Market•unemployment and fall in real GDP.
Inflationary pressures ease and central banks respond to the crisis
by cutting interest rates, which fall back to levels seen prior to theRussia Ukraine war.

• Inflation continues to increase globally. Central banks continue toInterest rates
increaseraise interest rates (beyond current levels).

• Real GDP growth stagnates for a protracted period.
• This is based on the September 2022 Bank of England Annual

Principal risks
and uncertainties• Strategic risk
• Credit risk
• Interest rate risk in thebanking book (IRRBB)• Strategic risk
• Credit risk
• Market (FX) risk

Cyclical Scenario.

Expansion• An operational event occurs, which results in severe reputational
Revolut launched its app and services in Brazil (May 2023) and New Zealand (July2023) following successful completion of testing.

Idiosyncratic

Reputational
damagedamage.

• Many customers withdraw funds and stop using Revolut.
• It takes considerable time before trust is restored.

• Strategic risk
• Operational risk

Board Member Appointment
In all of these scenarios, the Group is able to meet its regulatory capital and liquidity
requirements without the need for external financing.

In November 2023, Revolut announced the appointment of Dan Teodosiu to the Board
as a Non-Executive Director. Please see the Board of Directors section on page 60 for
Mr Teodosiu's biography.

Branches Outside
the UK

Revolut Annual Report 2022

The Directors have considered forecasts for the Group and have, at the time of
approving these consolidated financial statements, a reasonable expectation that
the Group and the Company have adequate resources to continue in operation fora period of at least twelve months from the date of approval of the consolidated
financial statements.

The Group operates through a number of branches outside the UK, the details of
which are disclosed in Note 14 of the consolidated financial statements.

72

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Directors’ Report

Corporate GovernanceDirectors’ Responsibilities
Statement

Directors' Responsibilities Statement

Disclosure of Information to the Auditor

AuditorDirectors’ Report

The directors are responsible for preparing the Annual Report, the Strategic
Report, the Directors' Report and the Financial Statements in accordancewith applicable law and regulations.

The directors have chosen to prepare the Group Financial
Statements in accordance with the International Financial
Reporting Standards (IFRS) as adopted by the United
Kingdom (UK) and the Companies Act 2006 and the Company
Financial Statements in accordance with Financial ReportingStandard 101, ‘Reduced Disclosure Framework’ (FRS 101) andthe Companies Act 2006.

⚫ Provide additional disclosures in certain circumstances
to ensure that readers of the financial statements canunderstand the impact of particular transactions andmatters on the Group and Company’s financial position
and financial performance;

The law provides that the directors may only approve thefinancial statements if they are satisfied that they give a trueand fair view of the state of affairs of the Group and Company
and of the profit or loss of the Group and Company for thefinancial year to which they relate.

⚫ Make an assessment of the Group and Company’s ability
to continue as a going concern; andIn preparing the financial statements, the directors are
required to:⚫ Maintain appropriate accounting records which enable
the directors to understand the Company’s and Group’stransactions and financial position;⚫ Select appropriate accounting policies and apply themconsistently;⚫ Present information, including accounting policies, in amanner that provides relevant, reliable, comparable andunderstandable information;⚫ Ensure that the financial statements comply with therequirements of the Companies Act 2006;

Corporate Governance

Disclosure ofInformation to the
AuditorDirectors' Responsibilities Statement

Disclosure of Information to the Auditor

AuditorEach of the directors as of the date of approval of this Directors’ Report has
confirmed that:⚫ So far as the directors are aware, there is no relevant audit information of which
the Company and the Group's auditors are unaware; and⚫ Each of the directors has taken all of the steps that ought to have been taken as adirector in order to be aware of any relevant audit information and to establish that
the Company and the Group's auditors are aware of that information.

Auditor

BDO LLP have indicated their willingness to be reappointed as auditors for anotherterm and appropriate arrangements will be put in place for them to be deemed
reappointed.
This report was approved by the Board on 19 December 2023 and signed on its behalf.

⚫ Use the going concern basis of accounting unless theyeither intend to liquidate the Company or to cease
operations, or have no realistic alternative but to do so.
The directors are responsible for such internal control as they
determine necessary to enable the preparation of financial
statements that are free from material misstatement, whether
due to fraud or error, and have general responsibility for taking
such steps as are reasonably open to them to safeguard
assets of the Group and Company and to prevent and detectfraud and other irregularities. The directors are responsible forthe maintenance and integrity of the corporate and financial
information on the company's website. Legislation in the
United Kingdom governing the preparation and disseminationof the financial statements may differ from legislation in otherjurisdictions.

Nik Storonsky
Director
19 December 2023

⚫ Make judgments and accounting estimates that arereasonable and prudent;

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Independent Auditor’s Report

Qualified opinion on the financial statements
In our opinion, except for the possible effects on the prior year figures of the matter described in the basis for qualified opinion
section of our report the financial statements:⚫ give a true and fair view of the state of the Group’s and Parent Company’s affairs as at 31 December 2022 and of its profit for
the year then ended;

INDEPENDENT AUDITOR’SREPORT TO THE MEMBERS
OF REVOLUT GROUPHOLDINGS LIMITED⚫ the Group financial statements have been properly prepared in accordance with United Kingdom adopted international
accounting standards;⚫ the Parent Company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted
Accounting Practice; and⚫ have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the financial statements of Revolut Group Holdings Ltd (“the Parent Company”) and its subsidiaries (“the Group”)
for the year ended 31 December 2022 which comprise the Consolidated statement of comprehensive income, Consolidated
statement of financial position, Consolidated statement of changes in equity, Consolidated statement of cash flows, Company
statement of financial position, Company statement of changes in equity and notes to the financial statements, including a summaryof significant accounting policies. The financial reporting framework that has been applied in the preparation of the Group financial
statements is applicable law and UK adopted international accounting standards. The financial reporting framework that has
been applied in the preparation of the Parent Company financial statements is applicable law and United Kingdom AccountingStandards, including Financial Reporting Standard 101 Reduced Disclosure Framework (United Kingdom Generally Accepted
Accounting Practice).

Basis for qualified opinion
Qualified opinion solely in respect of the comparability of the current year’s figures for revenue and related balances and theprior year figures
For the year ending 31 December 2021 the group’s IT systems were not designed in such a way that would allow for IT or businessprocess controls to be effectively tested throughout the year and substantive procedures alone were not able to provide sufficientappropriate assurance over the completeness and occurrence of revenue within Subscription, Card Delivery and Foreign Exchange
and Wealth revenue streams totalling £476,856k for the year then ended. Consequently, we were unable to determine whether
any adjustments to these revenues or related amounts were necessary. Our audit opinion on the financial statements for the year
ended 31 December 2021 was modified accordingly.
This matter has been resolved, and therefore we have been able to obtain sufficient appropriate audit evidence in respect of therelevant balances included in the financial statements as at and for the year ended 31 December 2022. Our opinion is only modified
because of the possible effect of this matter on the comparability of the current year’s figures for revenue and related balances
and the prior year figures.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our qualified opinion.
Independence
We are independent of the Group and Parent Company in accordance with the ethical requirements that are relevant to our auditof the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities inaccordance with these requirements.

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Independent Auditor’s Report

Independent Auditor’s Report

Conclusions relating to going concern

Responsibilities of Directors

In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.

As explained more fully in the Directors’ responsibility statement, the Directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine isnecessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or
error.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group or Parent Company's ability to continue as a going concern fora period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sectionsof this report.

In preparing the financial statements, the Directors are responsible for assessing the Group and Parent Company’s ability tocontinue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis ofaccounting unless the Directors either intend to liquidate the Group or Parent Company or to cease operations, or have no realistic
alternative but to do so.

Other information

Auditor’s responsibilities for the audit of the financial statements

The directors are responsible for the other information. The other information comprises the information included in the annual
report and consolidated financial statements other than the financial statements and our auditor’s report thereon. Our opinion on
the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report,
we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doingso, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in
the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent
material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements
themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information,
we are required to report that fact.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is ahigh level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in theaggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial
statements.

As described in the basis for qualified opinion section of our report, where the other information refers to revenue or relatedbalances the current year and prior year figures may not be comparable.

Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including fraud is detailed below:
Identifying and assessing potential risks related to irregularities

Other Companies Act 2006 reporting
Except for the possible effects of the matter described in the basis for qualified opinion section of our report, in our opinion, basedon the work undertaken in the course of the audit:⚫ the information given in the Strategic report and the Directors’ report for the financial year for which the financial statements
are prepared is consistent with the financial statements; and⚫ the Strategic report and the Directors’ report have been prepared in accordance with applicable legal requirements.

In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance withlaws and regulations, we considered the following:
1.

The legal and regulatory framework applicable to Revolut Group Holdings Ltd and the industry in which it operates andconsidered the risk of acts by Revolut Group Holdings Ltd which would be contrary to applicable laws and regulations,
including fraud. These included but were not limited to compliance with relevant regulatory bodies, pension legislation andtax legislation. We focused on laws and regulations that could give rise to a material misstatement in the Group and Parent
Company financial statements.

Except for the possible effects of the matter described in the basis for qualified opinion section of our report, in the light of theknowledge and understanding of the Group and Parent Company and its environment obtained in the course of the audit, we havenot identified material misstatements in the Strategic report or the Directors’ report.

2. The susceptibility of the Group’s financial statements to material misstatement, including how fraud might occur, by considering
the nature of the industry, sector and control environment and controls established by the Group to address risks identified by
the Group or that otherwise seek to prevent, deter or detect fraud.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report
to you if, in our opinion:

3. Due to the acute dependency of the Group on its IT infrastructure we performed an assessment of the IT landscape, performed
bidirectional data flow assessments across product cycles identified as key, and assessed the design of the IT environmentand relevant activity level controls across the customer lifecycle for those products and services.

⚫ adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not
visited by us; orAudit response to the risks identified⚫ the Parent Company financial statements are not in agreement with the accounting records and returns; orAs a result of assessing the above we identified the developing financial control environment as the key risk in respect of how theaudit was capable of detecting irregularities including fraud.

⚫ certain disclosures of Directors’ remuneration specified by law are not made; or⚫ we have not received all the information and explanations we require for our audit.

Revolut Annual Report 2022

As we were able to place reliance on relevant IT controls, we followed a combined audit approach to obtain evidence from controls
and substantive procedures. Due to the nature of the entity’s operations, we focused our procedures on the existence of own cash
balances, the existence of cash and commodities held in client designated bank accounts, and the completeness and accuracy ofclient liabilities associated with those cash and commodities balances held in third party bank accounts.
78

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Independent Auditor’s Report

Independent Auditor’s Report

Risk – Existence of own and client cash and commodities held by the entity as at the year end

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members andremained alert to any indications of fraud or non-compliance with laws and regulations.

Our procedures included the following:⚫ We obtained independent confirmation of 100% of cash balances held on behalf of customers with third parties.
⚫ We obtained independent confirmation of 100% of commodities held with third parties.
⚫ We obtained independent confirmation of 99.99% of own cash, other high quality liquid assets (HQLAs), and short-term
financial assets held with third parties, with appropriate rationalisation and alternative procedures performed on the remaining
immaterial 0.01%.

Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising thatthe risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as
fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent
limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from theevents and transactions reflected in the financial statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/
auditorsresponsibilities. This description forms part of our auditor’s report.

Risk – Completeness and accuracy of customer liabilities recognised as at the year end
Use of our report

Our procedures included the following:⚫ Interrogation procedures in respect of the completeness and accuracy of data integrations and reconciliations relevant torevenue recognition and client liabilities, including assessment and test of effectiveness of IT general and automated controls
relating to the core operating platforms and general ledger.
⚫ We performed a reconciliation of brought forward and year end client liabilities via recalculation of transactional e-money
activity in the year.

This report is made solely to the Parent Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might state to the Parent Company’s members those matters we are
required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the Parent Company and the Parent Company’s members as a body, for our audit
work, for this report, or for the opinions we have formed.

⚫ We used data analytics techniques to independently recalculate total e-money in issue at an individual user level by directinterrogation of the entity’s IT environment for evidence of understatement of customer liabilities.
⚫ We performed analytics over e-money transactional revenues to identify anomalies and outliers in fees levied for indicationsof fraudulent revenue recognition.
⚫ We performed analytics over certain third-party internet review sites for customer sentiment.
⚫ We performed analytics of customer account activity behaviours and tested a sample based on risk criteria for evidence of
misallocation and/or misappropriation of customer liabilities.

Matthew Hopkins(Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London, UK⚫ We reviewed available external complaints data including that recorded by the Bank of Lithuania and compared to internal data
source(s) to assess potential incompleteness of customer complaints recorded by the entity.
⚫ We reviewed and performed analytics over customer complaints and tested a sample based on a number of risk criteria forindications of systemic evidence of understatement of customer liabilities.

19 December 2023

⚫ We included as part of our substantive procedures in respect of the revenue and treasury cycles verification of customer
existence procedures (onboarding) for indicators of fictitious customers and accounts.
⚫ We obtained confirmations over a number of customer balances and year end transactions direct from customers based on
specific risk criteria and characteristics.
In addition to the above our procedures to respond to risks included, but were not limited to:⚫ Review of correspondence with and reports to the regulators, including the FCA, the Bank of Lithuania, and other regulatory
bodies;⚫ Review of management’s reporting to the Board Audit and Risk Committee in respect of compliance and legal matters;⚫ Enquiring of management and review of internal audit reports in so far as they related to the financial statements;⚫ Identifying and testing journal entries to respond to the risk of management override of control;⚫ Reviewing dispute logs, breaches/incidents log, legal expenses and whistleblowing reports.

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
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Financial Statements

Consolidated Statementof Comprehensive Income
for the year ended 31 December 2022

FINANCIALSTATEMENTS

Note
Revenue

2022

2021*

£000

£000

922,547

637,931

Fee income

6792,573

636,046

Interest income

782,689

1,726

Other income

847,285

159(280,889)(218,075)(228,320)(177,590)

7(16,065)(21,026)

Credit losses on lending products

29.1(5,180)(1,034)Credit losses on non-lending products

29.1

Cost of sales
Fee expense
Interest expense

Other operating expenses
Gross profit

Administrative expenses

9(Loss)/profit before tax

Tax credit/(expense)

11.1

Net profit for the year

(8,458)(9,606)(22,866)(8,819)641,658

419,856(667,076)(380,065)(25,418)

39,791

31,220(13,451)

5,802

26,340

Other comprehensive income/(loss)
Items that may be reclassified subsequently to profit or loss
Currency translation differences26

17,442(9,237)

Changes in the fair value of financial assets held at FVOCI

26(14,915)

2,602

Tax on components of other comprehensive income

11.3

3,444

—

Other comprehensive income/(loss), net of tax

5,971(6,635)

Total comprehensive income for the year

11,773

19,705*The Group has elected to modify the presentation of the Consolidated Statement of Comprehensive Income to enhance user
understanding of the financial performance under the guidance of IFRS, as disclosed in Note 2.3.
The accompanying notes form an integral part of this consolidated financial statement.
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented
its own statement of comprehensive income in these consolidated financial statements.
The Company's net profit for the year ended 31 December 2022 amounted to £246.5 million (2021: £nil).

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Financial Statements

Financial Statements

Consolidated Statementof Financial Position

Company Statementof Financial Position

At 31 December 2022

At 31 December 2022
31 December 2022

31 December 2021

Note

£000

£000

Cash and cash equivalents

12

10,581,018

7,052,609

Treasury investments

13

2,694,659

1,236,481

Investment in commodities

15

94,221

66,356

Trade and other receivables

16

341,559

206,880

Loans and advances to customers

17

203,580

17,816Inventories

18

18,604

7,396

28.4

7,681

9,294

Current tax assets

11

7,329

7,291

Deferred tax assets

11.4

93,684

1,783

Property, equipment, and right-of-use assets

19

21,94025,128Intangible assets

20

2,504

721

14,066,779

8,631,755

AssetsDerivative financial assets

Total assets
Liabilities
Customer liabilities

21

12,593,188

7,361,196

Trade and other payables

22

183,084

165,248

Derivative financial liabilities

28.4

90,0172,454

23

16,314

1,812

9,641

14,246

Provisions for liabilities
Lease liability
Loans and borrowings

24

36

122

Current tax liabilities

11

3,166

9,374

Deferred tax liabilities

11.4

—

243

12,895,446

7,554,695

Total liabilities

Note

31 December 2022

31 December 2021

£000

£000

AssetsTrade and other receivables

16

151

—

Investment in subsidiaries

14

1,313,688—

6—

1,313,845

—

893

—

893

—

—

—

Share premium

182—

Merger reserve913,212—Retained earnings

246,454—

153,104—

Total equity

1,312,952—

Total liabilities and equity

1,313,845—

Deferred tax assets
Total assets

Liabilities
Trade and other payables

22

Total liabilities

EquityShare capital

Other reserves

25

26

The accompanying notes form an integral part of this individual financial statement. The consolidated financial statements on
pages 90 to 167 were approved and authorised for issue by the Board and were signed on its behalf on 19 December 2023.

EquityShare capital

25

—

—

182

—

—

1,287,452

Merger reserve

1,287,803—

Accumulated deficit(312,158)(317,960)

195,506

107,568

1,171,333

1,077,060

14,066,779

8,631,755

Share premium
Net parent investment

Other reserves
Total equity
Total liabilities and equity

2.1

26

Nik Storonsky
Director*The Group has elected to modify the presentation of the Consolidated Statement of Financial Position to enhance user
understanding of the financial performance under the guidance of IFRS, as disclosed in Note 2.3. The accompanying notes form
an integral part of this consolidated financial statement. The financial consolidated statements on pages 90 to 167 were approved
and authorised for issue by the Board and were signed on its behalf on 19 December 2023.

Nik Storonsky
Director

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Financial Statements

Financial Statements

Consolidated Statementof Changes in Equity

Company Statementof Changes in Equity

Share
capitalSharepremium

Net parent
investment

Mergerreserve

Other
reserves

Accumulated
deficitTotal
equitySharecapitalSharepremium

Mergerreserve

Other
reserves

Retainedearnings

Total
equity

£000

£000

£000

£000

£000

£000

£000

£000

£000

£000

£000

£000

£000

At 1 January 2021——

697,444—

67,296(344,300)

420,440

At 1 January 2021

—

—

—

—

—

—

Net profit for the year

—

—

—

—

—

26,34026,340Net profit for the year

—

—

—

—

—

—

Other comprehensive loss for theyear, net of tax

—

—

—

—

(6,635)—(6,635)

Total comprehensive income forthe year

—

—

—

—

—

—

Total comprehensive income forthe year

—

—

—

—

(6,635)

26,34019,705

Shares issued during the year

—

—

—

—

—

—

Equity-settled share-based
compensation

—

—

—

—

—

—

Transactions with owners

Transactions with owners

Shares issued during the year——

590,008———

590,008

Equity-settled share-based
payment charge

—

—

—

—

47,352—47,352

Purchase of own shares within
Employee Benefit Trust

—

—

—

—

—

—

Purchase of own shares within
Employee Benefit Trust

—

—

—

—

(445)

—

(445)

Tax impact of equity-settled sharebased payment charge

—

—

—

—

—

—

Tax impact of equity-settled
share-based payment charge

—

—

—

—

—

—

—

Total transactions with owners

—

—

—

—

—

—

At 31 December 2021

—

—

—

—

—

—

Total transactions with owners——

590,008—

46,907—

636,915

At 31 December 2021——

1,287,452—

107,568(317,960)

1,077,060

At 1 January 2022

—

—

—

—

—

—

Net profit for the year

—

—

—

—

246,454

246,454

At 1 January 2022——

1,287,452—

107,568(317,960)

1,077,060

Net profit for the year

—

—

—

—

—

5,802

5,802

Total comprehensive income forthe year

—

—

—

—

246,454

246,454

Other comprehensive income forthe year, net of tax

—

—

—

—

5,971

—

5,971

Total comprehensive income forthe year—

Shares issued during theyear, including the impact ofreorganisation—

182

913,212

137,695—

1,051,089

—

—

—

(445)

—

(445)

—

—

—

5,971

5,802

11,773

Transactions with owners

Transactions with owners

Shares issued during the year

—

182

86

—

—

—

268

Transfer of reserve uponreorganisation

Adjustment to accrued expenses
related to issuance of shares

—

—

265

—

—

—

265

Equity-settled share-based
payment charge

—

—

—

16,300—16,300Transfer upon reorganisation——(1,287,803)

1,287,803

—

—

—

—

—

—

(446)

—

(446)

Equity-settled share-based
payment charge

Purchase of own shares within
Employee Benefit Trust

—

—

—

—

39,049—39,049

—

—

—

—

—

—

Purchase of own shares within
Employee Benefit TrustTax impact of equity-settled sharebased payment charge

—

—

—

—

(446)

—

(446)

Total transactions with owners—

182

913,212

153,104—

1,066,498

Tax impact of equity-settled
share-based payment charge

At 31 December 2022—

182

913,212

153,104

246,454

1,312,952

—

—

—

—

43,364—43,364

Total transactions with owners—

182(1,287,452)

1,287,803

81,967—82,500At 31 December 2022

—

182

—

1,287,803

195,506(312,158)

1,171,333

The accompanying notes form an integral part of this individual financial statement.

The accompanying notes form an integral part of this consolidated financial statement.

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Financial Statements

Financial Statements

Consolidated Statementof Cash Flows

Consolidated Statementof Cash Flows (continued)

for the year ended 31 December 2022
2022

2021

Cash flows from investing activities

£000

£000

Purchase of property and equipment(4,381)(1,684)

Payments to develop or acquire intangible assets(2,041)(5,168)Net purchase of treasury investments(1,382,982)(1,242,842)

Net cash from investing activities(1,389,404)(1,249,694)

Cash flows from operating activities(Loss)/profit before tax(25,418)

39,791

Adjustments for non-cash items
Interest income(14,785)—

Interest expense

553

1,813

Cash flows from financing activities

Amortisation of intangible assets

52

176

Proceeds from issue of ordinary shares net of transaction costs

268

601,878(5,639)(4,740)(98)(81,690)(5,469)515,448

819

7,278

Principal payments on lease liabilities

Depreciation of property, equipment, and right-of-use assets

9,050

8,903

Loans repaid

Increase/(decrease) in provisions

14,50224

Net change in expected credit losses

8,316

7,923

Net gain on changes in the fair value on hedging derivatives and hedged items(7,409)(8,689)Net increase in cash and cash equivalents

3,365,788

2,012,550

Share-based payments

39,04947,351

Cash and cash equivalents at beginning of year

7,052,609

5,055,023

8,672

—

Impairment losses other than expected credit losses

Other non-cash items in (loss)/profit before tax
Operating cash flows before movements in working capital and movements in customer
balances and hedging arrangements

33,401

104,570

Net cash from financing activities

Effect of exchange rates on cash and cash equivalents

162,621(14,964)

10,581,018

7,052,609

Interest paid

15,512

19,213

Interest received

67,904

1,726

Cash and cash equivalents at end of year

Additional information on cash flows from operating activities
Movements in working capital(Increase)/decrease in inventories(11,208)

3,886

Loans extended to directors—(3,200)Loans settled by directors

—

3,216

(Increase)/decrease in trade and other receivables(121,967)(69,468)

Increase/(decrease) in trade and other payables(8,158)94,489(107,932)

133,493

Net increase/(decrease) in customer liability in respect of deposits

6,530,072

533,970

Net increase/(decrease) in e-money in issue(1,472,995)

2,174,430

Net (increase)/decrease in negative customer balances(6,771)(8,186)

Net (increase)/decrease in net settlement balances

25,079(63,979)

Net increase/(decrease) in customer liability in respect of commodities

29,026

15,543

Net (increase)/decrease in investment in commodities(27,865)(15,990)

Operating cash flows before movements in customer balances and hedging arrangements*The presentation of the Consolidated Statement of Cash Flows has been modified to present non-cash interest income andexpense as a component of net cash from operating activities.

Movements in customer balances and hedging activities

Net (increase)/decrease in loans and advances to customers(191,053)(16,440)

Cash generated from operations

4,777,561

2,752,841

3,471

3,856

(20,371)(9,901)4,760,661

2,746,796

R&D credit received
Taxes paid
Net cash from operating activities

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Notes to the Consolidated Financial Statements

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

1. General Information

NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS

Revolut Group Holdings Ltd (the 'Company') and its subsidiaries (together, the 'Group' and 'Revolut') provide electronic money andpayment services through prepaid cards, currency exchange, peer-to-peer payments, cryptocurrency and commodity exposures,
share trading, consumer loans and credit cards for retail users. They also offer a similar proposition to business customers
encompassing multi-currency exchange, prepaid corporate cards, international and domestic bank transfers to freelancers, andSmall and Medium Enterprises.
The Company is a private company limited by shares and incorporated in England & Wales. The registered office and the principal
place of business is 7 Westferry Circus, Canary Wharf, London, England, E14 4HD.

2. Basis of Preparation
The consolidated financial statements of the Group have been prepared in compliance with the International Financial ReportingStandards ('IFRS') as adopted by the United Kingdom ('UK') and the Companies Act 2006. The individual financial statements of
the Company have been prepared in accordance with Financial Reporting Standard 101, ‘Reduced Disclosure Framework’ ('FRS
101') and the Companies Act 2006.
The consolidated and individual financial statements are prepared on a going concern basis (as disclosed in Note 3), under thehistorical cost convention, as modified by the recognition of certain assets and liabilities at fair value as disclosed in Note 4.
The preparation of consolidated financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgment in the process of applying the Group and Company accounting policies. The areas involving
a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial
statements, are disclosed in Note 5.
The Company has taken advantage of the exemption in section 408 of the Companies Act 2006 to refrain from presenting its
individual statement of comprehensive income.
Although these consolidated financial statements have been released in the name of the parent, Revolut Group Holdings Ltd, they
represent the in-substance continuation of the previous Group headed by Revolut Ltd. The following accounting treatment has
been applied to account for the restructuring of the Group set out in Note 2.1 (the 'Restructuring'):⚫ The consolidated assets and liabilities of the subsidiary Revolut Ltd assumed by the Company on the date of the Restructuring
were recognised and measured at the pre-Restructuring carrying amounts, without restatement to fair value;⚫ The equity balances recognised in the Consolidated Statement of Financial Position include the accumulated impact of equity
movements of Revolut Ltd from 1 January 2022 to 29 April 2022, the date of the Restructuring, as the Company was not
active prior to the date of the Restructuring, and also include the accumulated impact of equity movements of Revolut Group
Holdings Ltd from 30 April 2022 onwards, including the equity instruments issued to effect the Restructuring; and⚫ Comparative figures presented in the consolidated financial statements are those reported in the consolidated financial
statements of Revolut Ltd, as at & for the year ended 31 December 2021, except for the presentation of the share capital andshare premium, which have been presented as net parent investment to reflect the impact of the Restructuring as if Revolut
Group Holdings Ltd had been the parent company during such period.

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Notes to the Consolidated Financial Statements

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

Notes to the Consolidated Financial Statements

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

2.1 Restructuring of the Group

2.3 Modifications to presentation

During 2022, the Revolut group of companies underwent a business combination under common control as follows.

The operations and strategic priorities of the Group have continued to evolve over time. The Group has elected to make deliberatechanges to presentation elements to enhance user understanding of the entity’s financial performance under the guidanceof IFRS, more fairly represent business performance and simplify comparison with peer organisations. Following significant
growth in the nature of the Group’s operations and a review of the Group’s consolidated financial statements, management has
concluded that these modifications to presentation are appropriate, having regard to the criteria for the selection and applicationof accounting policies. All changes are applied retrospectively, with disclosures for comparative periods modified to align withpresentation standards for the current year. There is nil impact from each modification to presentation on net profit for the year
for the comparative period versus those previously reported, individually and in aggregate. Additionally, there is nil impact for each
modification to total assets, total liabilities, or total equity on the Consolidated Statement of Financial Position.

On 29 April 2022, Revolut Group Holdings Ltd, a company incorporated and domiciled in the United Kingdom acquired theownership interest of Revolut Ltd, a company incorporated and domiciled in the United Kingdom via a share-for-share exchange.
On 7 June 2022, Revolut Ltd transferred its direct 100% ownership interests in the following companies via a share-for-shareexchange to Revolut Holdings Europe UAB, a company incorporated and domiciled in Lithuania, to establish a European Union
sub-group headed by Revolut Holdings Europe UAB:
⚫ Revolut Bank UAB, a company incorporated and domiciled in Lithuania⚫ Revolut Insurance Europe UAB, a company incorporated and domiciled in Lithuania

Consolidated Statement of Comprehensive Income⚫ Revolut Payments UAB, a company incorporated and domiciled in Lithuania⚫ Revolut Securities Europe UAB, a company incorporated and domiciled in Lithuania
On 25 July 2022, Revolut Ltd transferred its direct 100% ownership interests in the following companies via a dividend in specie to
Revolut Group Holdings Ltd:
⚫ Revolut Holdings International Ltd, a company incorporated and domiciled in the United Kingdom⚫ Revolut Holdings US Inc, a company incorporated and domiciled in the United States of America⚫ Revolut NewCo UK Ltd, a company incorporated and domiciled in the United Kingdom⚫ Revolut Corporate Services Ltd (formerly known as Revolut FIC Ltd) a company incorporated and domiciled in the
United Kingdom
On 2 September 2022, Revolut Ltd transferred its direct 100% ownership interest in Revolut Travel Ltd, a company incorporated anddomiciled in the United Kingdom, to Revolut NewCo UK Ltd via a share-for-share exchange.
On 25 October 2022, Revolut Ltd transferred its direct 100% ownership interests in the following companies via a dividend inspecie to Revolut Group Holdings Ltd:
⚫ Revolut Holdings Europe UAB⚫ RT Digital Securities Cyprus Ltd, a company incorporated and domiciled in Cyprus
On 25 October 2022 Revolut Ltd transferred its entire ownership interest in Revolut Payments India Private Ltd, a company
incorporated and domiciled in India via a dividend in specie to Revolut Group Holdings Ltd.

The yield receivable from the Group’s cash, cash equivalents, loans and advances to customers, and treasury investment portfolio
was previously presented on the Consolidated Statement of Comprehensive Income as interest income below profit or loss fromoperations. This income now forms a significant and material element of the core operations of the Group, which aims to generate
stakeholder value by maintaining a return on assets. The return in key jurisdictions has increased commensurate with the growthin our interest-bearing asset portfolio and shifts in the interest rate climate in those jurisdictions. Accordingly, the Group now
recognises material income from this core income stream. The Group has therefore elected to modify the presentation of thisincome to be included as a component of revenue, which reinforces designation as a primary constituent of the core operationsof the Group’s financial performance. Cardholder and merchant fees including interchange, fair usage, subscription, foreignexchange & trading commissions have been presented as fee income to establish an explicit distinction from revenue generated
from interest-bearing assets. Similarly, the net fair value gain on derivative instruments has been presented as other income.
The cost to the Group of holding customer deposits in negative interest rate justifications was previously presented on theConsolidated Statement of Comprehensive Income as interest expense below profit or loss from operations. This expense is now
an intrinsic element of the core operations of the Group. The Group has therefore elected to modify the presentation of this expense,
along with other forms of interest expense, to be included as a component of cost of sales, which reinforces designation as a
primary constituent of the core operations of the Group’s financial performance. Costs associated with processing transactions inaddition to all other direct costs of providing our customers with the core services necessary to generate fee income, have beenpresented as fee expense. This has been done to establish an explicit distinction from the cost of interest. All other indirect costs
previously included within cost of sales have been presented as other operating expenses.
Issuing credit to customers generates an unavoidable risk of credit loss. Generating a positive net interest yield after recognition of
expected credit losses is the core mandate for the Group’s credit business. As such, the Group has elected to present impairment
loss / (credit) as a component of cost of sales while simultaneously renaming the financial statement caption to change in expectedcredit losses, which clarifies that the disclosed amounts are prepared in accordance with the relevant impairment standards in
IFRS 9.
The aggregate impact of these presentation changes produces a revised gross profit that fairly demonstrates the Group’s returnon core operating activities prior to administrative and tax-related expenses.

2.2 Separate Financial Statement of the Company Exemption under FRS 101
The following exemptions from the requirements of IFRS have been applied in the preparation of individual financial statements ofRevolut Group Holdings Ltd, in accordance with FRS 101:
⚫ The requirements of paragraphs 45(b) of IFRS 2 Share-based Payment

The Group has elected to aggregate expenses related to depreciation, amortisation, and other administrative operating expenses
within a consolidated caption on the Consolidated Statement of Comprehensive Income called administrative expenses. This wasdone to streamline the presentation of elements that are not so individually significant to the net profitability of the Group that they
warrant explicit disclosure on the face of the statements.
The Group has modified the disaggregation of its disclosure of its administrative expenses in Note 9 and trade and otherreceivables in Note 16 to provide users of the consolidated financial statements with an expanded understanding of the entity’s
financial performance. In doing so, certain staff-related costs previously allocated to other costs during the comparative period
were reclassified to total staff costs to benefit the fair categorisation of the Group’s expenses.

⚫ The requirements of paragraphs 79(a)(iv) and 111 of IAS 1 Presentation of Financial Statements⚫ The requirements of IAS 7 Statement of Cash Flows⚫ The requirements of paragraph 17 of IAS 24 Related Party Disclosures⚫ The requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or moremembers of a group
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Notes to the Consolidated Financial Statements

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

The Group has aggregated its disclosure of fee income related to card delivery and other to benefit the brevity of individuallyinsignificant revenue streams.

Notes to the Consolidated Financial Statements

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

Consolidated Statement of Financial Position
The Group has elected to modify the presentation of the Consolidated Statement of Financial Position in a manner that is reliable
and more relevant to the users of its consolidated financial statements. All assets and liabilities are presented in order of liquidity.

2021(published)

Presentation
adjustments

£000

£000

Revenue
Revenue2021(revised)£000
637,931636,205

Financial assets measured at FVOCI have been presented as treasury investments in order to facilitate the inclusion of new
financial assets measured at amortised cost for the year ended 31 December 2022, within the same financial statement caption,
while maintaining accuracy with regards to the classification of financial assets. The Group has made other minor modifications topresentation of financial statement captions in order to enhance user understanding of the Group's assets and liability positions.

(636,205)—

636,046

636,046

Interest income

1,726

1,726

Other income

159

159

2021
(published)

Presentation
adjustments

2021(revised)(218,075)

£000

£000

£000

Fee income

Cost of sales
Cost of sales

Assets196,015—

Fee expense(177,590)(177,590)

Interest expense(21,026)(21,026)

Cash and cash equivalents

7,052,609—

7,052,609

Credit losses on lending products(1,034)(1,034)

Financial assets at FVOCI

1,236,481(1,236,481)—

Credit losses on non-lending products(9,606)(9,606)

Treasury investments—

1,236,481

1,236,481

Other operating expenses(8,819)(8,819)Investment in commodities at FVTPL

66,356(66,356)—

419,856

Investment in commodities—

66,356

66,356

Trade and other receivables

206,880—

206,880

Loans and advances to customers

4,870

12,946

17,816Gross profit

Administrative expenses(196,015)

440,190(20,334)

Current assets(367,478)(12,587)(380,065)

Depreciation and amortisation expense(9,079)9,079—

Inventories

7,396

—

7,396

Impairment (loss) / credit(1,034)

1,034—

Derivative financial assets

9,294

—

9,294

Other operating (expense) / income(3,508)

3,508—

Current tax assets

7,291

—

7,291

Profit from operations

59,091(19,300)

39,791

Total current assets

8,591,177

12,946

Non-current assets
Interest expense(21,026)

21,026—

Deferred tax assets

1,783

—

1,783

Interest income

1,726(1,726)—

Property, equipment, and right-of-use assets

25,128—25,128

Profit before tax

39,791—39,791Loans and advances to customers

12,946(12,946)

—

721

—

721

40,578(12,946)

8,631,755—

8,631,755

Intangible assets
Tax expense(13,451)—(13,451)

Total non-current assets

Net profit for the year

26,340—26,340Total assets

Other comprehensive loss

Liabilities and equity

Items that may be reclassified subsequently to profit or loss

Current liabilities

Currency translation differences(9,237)—(9,237)

Customer liabilities

7,361,196—

7,361,196

Changes in the fair value of financial assets held at FVOCI

2,602

—

2,602

Trade and other payables

165,248—

165,248

Other comprehensive loss, net of tax(6,635)—(6,635)Derivative financial liabilities

2,454

—

2,454

Total comprehensive income for the year

19,705—

19,705Current tax liabilities

9,374

—

9,374

Lease liability

5,161

9,085

14,246Loans at amortised cost

122

(122)

—

Loans and borrowings

—

122

122

7,543,555

9,085

Total current liabilities

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Notes to the Consolidated Financial Statements

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

3. Going Concern

Non-current liabilities
Lease liability

Notes to the Consolidated Financial Statements

9,085(9,085)—Loans at amortised cost

—

—

—

Provisions for liabilities

1,812

—

1,812

Deferred tax liabilities

243

—

243

Total non-current liabilities

11,140(9,085)7,554,695—

7,554,695

The going concern assessment is based on the detailed forecast prepared by management. In the base case forecast, appropriate
assumptions have been made in respect to user growth, revenue growth and profitability, based on the historical performance ofthe business and expected changes to the business over the forecast period.

—

—

—

1,287,452(1,287,452)—

Net parent investment—

1,287,452

1,287,452

As part of the going concern review, the Directors have considered the same severe, but plausible, downside scenarios as used in
the Group's detailed ICAAP and ILAAP to stress test the viability of the business. The scenarios tested are shared below and were
tested before and after actions from Group management.

Merger reserve

—

—

—

Accumulated deficit(317,960)—(317,960)

Other reserves

107,568—

107,568

Total equity

1,077,060—

1,077,060

Total liabilities and equity

8,631,755—

8,631,755

Total liabilities

EquityShare capital
Share premium

The consolidated financial statements are prepared on a going concern basis as the Directors are satisfied that the Group and theCompany have the available resources to continue in business for a period of at least twelve months from the date of approval of
the consolidated financial statements.

Type

Scenario

Description⚫

Interest Rates
Decrease⚫

Market⚫
Interest Rates
Increase⚫
⚫
⚫

Idiosyncratic

Reputational
Damage⚫
⚫

In this scenario, a global stock market crash results in a sharp rise in
unemployment and fall in real GDP.
Inflationary pressures ease and central banks respond to the crisis by
cutting interest rates, which fall back to levels seen prior to the Russia
Ukraine war.
Inflation continues to increase globally. Central banks continue to raiseinterest rates (beyond current levels).
Real GDP growth stagnates for a protracted period.
This is based on the September 2022 Bank of England Annual Cyclical
Scenario.
An operational event occurs which results in a severe reputational
damage.
Many customers withdraw funds and stop using Revolut.
It takes considerable time before trust is restored.

Principal Risks
and Uncertainties⚫
⚫
⚫

Strategic risk
Credit risk
Interest raterisk in thebanking book
(IRRBB)⚫
⚫
⚫

Strategic risk
Credit risk
Market (FX)
risk

⚫
⚫

Strategic risk
Operationalrisk

In all of these scenarios, the Group is able to meet its regulatory capital and liquidity requirements without the need for externalfinancing.
The Directors have considered forecasts for the Group and have, at the time of approving these consolidated financial statements,a reasonable expectation that the Group and the Company have adequate resources to continue in operation for a period of atleast twelve months from the date of approval of the consolidated financial statements.

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Notes to the Consolidated Financial Statements

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

4.2 Basis of Consolidation

4. Significant Accounting Policies
The principal accounting policies applied in the preparation of these consolidated and individual financial statements are set out
below. These policies have been consistently applied to all years presented, unless otherwise stated.
4.1 Adoption of New and Revised Standards(a)Notes to the Consolidated Financial Statements

New standards, interpretations, and amendments adopted from 1 January 2022

New standards impacting the Group and Company that have been adopted in the consolidated financial statements for the year
ended 31 December 2022 are:

The Group consolidated financial statements include the financial statements of the Company and all of its subsidiary undertakings
made up to 31 December 2021 and 31 December 2022 on the basis described in Note 2.1.
Subsidiaries are all entities over which the Group has control. The Group controls an entity when it is exposed to, or has rights to,variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
Subsidiaries are fully consolidated from the date on which control is obtained by the Group and are de-consolidated from thedate that control ceases. Intercompany transactions, balances and unrealised gains on transactions between companies within
the Group are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an
impairment of the transferred asset. Group accounting policies are consistently applied to all entities and transactions.
Where a subsidiary has different accounting policies to the Group, adjustments are made to those subsidiary financial statements
to apply the group’s accounting policies when preparing the consolidated financial statements.

⚫ Onerous Contracts — Cost of Fulfilling a Contract — Amendments to IAS 37⚫ Annual Improvements to IFRS Standards 2018–2020 — Amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41⚫ Reference to the Conceptual Framework — Amendments to IFRS 3.

All intragroup transactions, balances, income and expenses are eliminated on consolidation. Adjustments are made to eliminate
the profit or loss arising on transactions with associates and equity-accounted joint ventures to the extent of the Group’s interestin the entity.

The adoption of the new standards listed above have not had a significant impact on the consolidated financial statements of theGroup or the Company individual financial statements for the year ended 31 December 2022.

4.3 Foreign Currency Translation(b) New standards, interpretations, and amendments not yet effective

Functional and presentation currency

There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are
effective in future accounting periods that the Group and Company have decided not to adopt early.

The Group consolidated financial statements are presented in pound sterling. The Company's functional and presentation
currency is the pound sterling.

⚫ Property, Plant and Equipment: Proceeds before Intended Use — Amendments to IAS 16

Transactions and balances
New standards or amendments

Effective for annual periods
beginning on or after

IFRS 17 Insurance Contracts and amendments to IFRS 17 Insurance Contracts

1-Jan-23

Disclosure of Accounting Policy — Amendments to IAS 1 and IFRS Practice Statement 2

1-Jan-23

Definition of Accounting Estimate — Amendments to IAS 8

1-Jan-23

Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction — Amendments to IAS 12
and IFRS 1

1-Jan-23

Classification of Liabilities as Current or Non-current — Amendments to IAS 1

1-Jan-24

Transactions are recorded at the spot exchange rate between the functional currency and the foreign currency at the dateof the transaction. At each period end, foreign currency monetary items are translated using the closing rate. Non-monetary
items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items
measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period end exchange
rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss. Non-monetary assets
and liabilities carried at fair value and denominated in foreign currencies are translated at the rates prevailing at the date when thefair value was determined.
Translation

Management does not expect that the adoption of the standards listed above will have a material impact on the annual consolidated
financial statements of the Group or Company in future periods.

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98

On consolidation, the results of overseas operations are translated into sterling at the average exchange rates for the year. All
assets and liabilities of overseas operations are translated at the exchange rate ruling at the Consolidated Statement of Financial
Position date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas
operations at actual rate are recognised in other comprehensive income.

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Notes to the Consolidated Financial Statements

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

Notes to the Consolidated Financial Statements

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

4.4 Fee Income

Subscriptions

The Group recognises revenue according to the principles of IFRS 15 using the five-step model:

Subscription revenue represents monthly and annual subscription fees charged to retail and business customers. The subscription
service has two distinct performance obligations: a card delivery service (which is recognised in other fee income) and an ongoingpayment processing service. Revenue for the subscription service is recognised in the month to which the subscription relates.
Where subscription fees are received in advance (namely annual subscription fees) they are initially recognised as contract
liabilities and are recognised as revenue in the Consolidated Statement of Comprehensive Income on a straight-line basis over theperiod of the subscription.

1.
2.
3.
4.
5.

Identify the contracts with customers
Identify the performance obligations in the contract
Determine the transaction price
Allocate the transaction to the performance obligations in the contract
Recognise the revenue when (or as) the entity satisfies the performance obligation

Any termination fees for existing subscriptions services ending early are recognised upon the termination date.
The Group derives its revenue from contracts with customers by transferring the following services.
Other
Card and interchange
Other fee income mainly comprises:
Card revenue represents transaction-related fees, including interchange fees receivable from the Group’s card issuing partners,
merchant acquiring fees, fair usage fees for cash withdrawals outside of customer plans allowances and top-up fees.
Card and interchange fees are deemed to include a single performance obligation under IFRS 15 Revenue from Contracts with
Customers; namely, the completion of a card transaction for a customer and as such, revenue is recognised at the time of thetransaction.

⚫ Revenue earned for the delivery of cards, which is recognised on the day the card is delivered to the customer⚫ Commission earned on the sale of insurance products to customers and is recognised at the time of the transaction⚫ Fees charged to customers in respect of remittances facilitated at customers request

Foreign exchange

Remaining performance obligations

Foreign exchange revenue represents markup fees charged on market exchange rates for weekend transactions and lessfrequently traded currencies, and fair usage fees where customers undertake additional exchange transaction volumes outsideof their plan allowances.

IFRS 15 allows the Group to exclude from its remaining performance obligations disclosure any performance obligations which
are part of a contract with an original expected duration of one year or less. Additionally, any variable consideration, for which it isprobable that a significant reversal in the amount of cumulative revenue recognised will occur when the uncertainty associatedwith the variable consideration is subsequently resolved, is not subject to the remaining performance obligations disclosure
because such variable consideration is not included in the transaction price (e.g. investment management fees).

Foreign exchange revenue has a single performance obligation; namely, the exchange of one currency for another between
customer’s currency pockets. Revenue is recognised at the point of this exchange.
Wealth

4.5 Fee Expense

Wealth comprises revenues from the Group’s cryptocurrency, commodities, trading, and savings products.

Fee expenses primarily relate to fees incurred by the Group in the processing and settlement of transactions, the costs ofproviding cards to customers and the costs of any redress payments made to customers who have been the subject of fraudulent
transactions.

The Group acts as an agent on behalf of its customers to buy or sell cryptocurrencies and listed company shares and the revenue
represents any exchange markup or commission charged, and any applicable fair usage fees. Buying or selling cryptocurrencies
or listed company shares has a single performance obligation; namely, the execution of a customer's order and as a result, revenue
is recognised at the time of the transaction.
When entering into commodity contracts with customers, the Group charges a markup on the market exchange rate for theexchange of e-money, and similarly when the customer settles the contract and receives e-money. Entering into or closing
commodity contracts comprises two performance obligations; namely, one when the contract is entered into and one when it
is settled. Each of these obligations incurs a separate fee and as such the relevant markup is recognised as revenue when thecontract is entered into and when it is settled.

Processing and settlement of transactions
These are costs primarily payable to the card schemes of which the Group is a member. Processing and settlement of transaction
costs are presented net of rebates received from payment scheme providers for scheme fee costs.
Providing cards to customers
These are the costs incurred by the Group to purchase, personalise and distribute cards to customers. Card stock is initiallyrecognised as inventory until the card is shipped to a customer, at which point it is expensed.

While open, the customer contracts are accounted for at fair value through profit or loss within revenue.
Redress payments
The Group hedges its exposure to customer commodity contracts through holding its own investments in commodities.
The net amount representing the change in fair value of the contracts with customers and the associated hedging investments
are presented net in the foreign exchange and wealth line within fee income. The policies and methodologies associated with thedetermination of fair value are included in Note 28.2.

These are amounts that the Group incurs where customers have been subject to fraudulent transactions or where charges havecaused a customer's account to have a negative balance.

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101

Notes to the Consolidated Financial Statements

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

4.6 Interest Income and Expense
Interest income
Interest income is recognised using the effective interest rate on: credit cards and loans arrangements entered into with customers;
financial assets held at fair value through other comprehensive income; safeguarded funds and cash and cash equivalents.
The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial
instrument to the gross carrying amount of the financial asset (before adjusting for expected credit losses).
Interest income from non-credit impaired financial assets is recognised by applying the effective interest rate to the gross carrying
amount of the asset; for credit impaired financial assets, the effective interest rate is applied to the net carrying amount after
deducting the allowance for expected credit losses.

Notes to the Consolidated Financial Statements

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

The fair value of the awards is recognised as an expense in the Consolidated Statement of Comprehensive Income over thevesting period with a corresponding increase in the share-based payment reserve in equity. The cumulative expense at eachreporting date is based on the total number of share-based payment awards that are expected to vest, taking into account theservice conditions and any non-market performance conditions such that the total cumulative amount recognised as an expense
over the vesting period is based on the number of share-based payment awards that eventually vest. The Group has to estimate
the expected yearly percentage of employees that will stay within the Group at the end of the vesting period of the sharebased payment awards in order to determine the amount of share-based compensation expense charged to the Consolidated
Statement of Comprehensive Income.
Where the terms and conditions of share-based payment awards are modified before they vest, to the extent that there is anincrease in the fair value of the share-based payment awards, measured immediately before and after the modification, this increaseis also recognised as an expense in the Consolidated Statement of Comprehensive Income over the remaining vesting period.
Share-based payments (Company)

Interest expense
Interest expenses are charged to interest expense in the Consolidated Statement of Comprehensive Income over the term of
the facility using the effective interest method. The effective interest rate is the rate that exactly discounts estimated future cash
payments through the expected life of the financial instrument.
Issue costs are initially recognised as a reduction in the proceeds of the associated instrument, when considered incremental anddirectly attributable to the instrument issued.

On 29 April 2022, the date of the group wide reorganisation, the Company recognised an increase in its share-based payment
reserve in equity with a corresponding reduction in its merger reserve to reflect the Company’s obligation arising from thereplacement of all outstanding unvested share-based payment awards previously issued by Revolut Ltd and settled in equity
instruments of Revolut Ltd, which were replaced on a one-for-one basis by share-based payment awards issued by Revolut Group
Holdings Ltd and settled in equity instruments of Revolut Group Holdings Ltd. All other conditions relating to share-based payment
arrangements were unchanged on replacement. Further details of the group wide reorganisation are set out in Note 2.1.
Where the Company grants share-based payment awards to employees of subsidiary companies, the relevant charge is recognised
as an increase in cost of investment in subsidiaries with a corresponding increase in the share-based payment reserve in equity.

4.7 Staff Costs
The Group provides a range of benefits to employees, including annual bonus arrangements, paid holiday arrangements, defined
contribution pension plans and share-based payments.

The tax expense/(credit) comprises current and deferred tax. Tax is recognised in profit or loss, except when a expense or credit
relates to an item that is recognised as other comprehensive income or recognised directly in equity, in which case the tax
expense or credit is also recognised in other comprehensive income or directly in equity, respectively.

Short-term benefits
Short-term benefits, including holiday pay and other similar non-monetary benefits, are recognised as an expense in the period
in which the service is received. A liability is recognised for the amount expected to be paid if the Group has a present legal
or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be
estimated reliably.

The current income tax credit is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by
the Consolidated Statement of Financial Position date in the countries where the Company and the Group operate and generate
income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the date of theConsolidated Statement of Financial Position, except that:

Defined contribution pension plan
The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which theGroup pays fixed contributions into a separate entity. Once the contributions have been paid, the Group has no further payment
obligations.
The contributions are recognised as an expense in the Consolidated Statement of Comprehensive Income when they fall due.
Amounts not paid are shown in accruals as a liability in the Consolidated Statement of Financial Position. The assets of the plan
are held separately from the Group in independently administered funds.
Share-based payments
The Group operates a number of share-based payment schemes. The purpose of these plans is to incentivise and remunerate theGroup’s employees. These schemes meet the definition of equity-settled share-based payment schemes. Estimating fair value forshare-based compensation transactions requires determination of the most appropriate valuation model, which depends on theterms and conditions of the grant. Revolut use third party valuation specialists to estimate the fair value of each grant based on
the terms of that grant as well as internal and market data. The Black-Scholes option pricing model was used to value the equitysettled share-based payment awards as the model is internationally recognised as being appropriate to value employee shareschemes similar to the Unapproved Options Plan ('UOP').
Revolut Annual Report 2022

4.8 Current and Deferred Taxation

102⚫ The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversalof deferred tax liabilities or other future taxable profits; and⚫ Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances may be recognised where they relate to timing differences in respect of interests in subsidiaries, associates,
branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered
probable in the foreseeable future. Deferred tax balances are not recognised in respect of permanent differences except in
respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired
and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amountthat will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted
by the Consolidated Statement of Financial Position date.
Deferred tax assets and liabilities are offset only if certain criteria are met.

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4.9 Property, Equipment, and Right-of-Use Assets
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated
impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location andcondition necessary for it to be capable of operating in the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using thestraight-line method.
Depreciation is provided on the following basis:
Fixtures and fittings
Office equipment		Computer equipment- 10% straight line
- 25% straight line
- 33% straight line

The assets' residual values, useful lives and depreciation methods are reviewed annually, and adjusted prospectively if appropriate,
or if there is an indication of a significant change since the last reporting date. Gains and losses on disposals are determined bycomparing the proceeds with the carrying amount and are recognised in administrative expenses in the Consolidated Statementof Comprehensive Income.

4.10 Leases
The Group assesses at contract inception whether a contract is, or contains, a lease; that is, if the contract conveys the right tocontrol the use of an identified asset for a period of time in exchange for consideration. As at 31 December 2022 and 2021 theGroup is a lessee in its lease arrangements, and is not a lessor.

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Variable rents that do not depend on an index or rate are not included in the measurement of the lease liability and the right-ofuse asset. The related payments are recognised as an expense in the period in which the event or condition that triggers thosepayments occurs and are included in the line administrative expense in the Consolidated Statement of Comprehensive Income(unless they are incurred to produce inventories, whereby they will be included as part of fee expense).
In calculating the present value of lease payments, the Group uses the rate implicit in the lease if it is readily determinable.
However, if the rate implicit in the lease is not readily determinable, the Group uses its incremental borrowing rate ('IBR') at thelease commencement date. After the commencement date, the amount of lease liabilities is increased to reflect the accretionof interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there
is a modification, a change in the lease term, a change in the lease payments (e.g. changes to future payments resulting from achange in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase theunderlying asset.
As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease andassociated non-lease components as a single arrangement. The Group has elected this practical expedient and will not separate
lease and non-lease components.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to those leases that have a lease term of twelve months or lessfrom the commencement date and do not contain a purchase option. It also applies the lease of low-value assets recognition
exemption to leases that are considered to be low value. Lease payments on short-term leases and leases of low-value assets
are recognised as expense on a straight-line basis over the lease term unless another systematic basis is more representative ofthe time pattern in which economic benefits from the leased assets are consumed. The Group recognised £2.7 million in lease
expense related to short-term and low-value assets for the period (2021*: £3.1 million).
*The lease expense has been restated in order to include all lease agreements for short-term and low-value assets.

The Group applies a single recognition and measurement approach for all lessee leases, except for short-term leases (defined
as leases with a lease term of twelve months or less) and leases of low-value assets. The Group recognises lease liabilities
representing obligations to make lease payments and right-of-use assets representing the right to use the underlying assets.

4.11 Intangible Assets

Right-of-use assets

Intangible assets acquired separately - computer software

The Group recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available
for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses and adjusted for any
remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct
costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use
assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets. If
ownership of the leased asset transfers to the Group at the end of the lease term or the cost reflects the exercise of a purchase
option, depreciation is calculated using the estimated useful life of the asset, otherwise the right-of-use asset is amortised overthe duration of the lease agreement. Depreciation starts at the commencement date of the lease.

Computer software is stated at cost less accumulated amortisation and accumulated impairment losses. Computer software isamortised on a straight-line basis over its estimated useful life, which is assessed to be three years.

The right-of-use assets are also subject to impairment. Refer to the accounting policies in Note 4.12, Impairment of non-financial
assets.

Intangible assets acquired in the business combination
Intangible assets acquired in a business combination and recognised separately from goodwill are recognised initially at their fairvalue at the acquisition date (which is regarded as their cost).
Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated
amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.
Derecognition of intangible asset

The right-of-use assets are presented along with property and equipment in the Consolidated Statement of Financial Position.
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains orlosses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and thecarrying amount of the asset, are recognised in profit or loss when the asset is derecognised.

Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to
be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease
incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual
value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercisedby the Group and payments of penalties for terminating the lease, if the lease term reflects the Group exercising the option toterminate.
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4.12 Impairment of Non-Financial Assets

Assessment whether contractual cash flows are solely payments of principal and interest

At each date of a Consolidated Statement of Financial Position, non-financial assets not carried at fair value are assessed todetermine whether there is an indication that the asset (or asset’s cash generating unit) may be impaired. If there is such anindication, the recoverable amount of the asset (or asset’s cash generating unit) is compared to the carrying amount of the asset(or asset’s cash generating unit).

For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial recognition. ‘Interest’is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding
during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well asa profit margin. In assessing whether the contractual cash flows are solely payments of principal and interest, the Group considers
the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that couldchange the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, theGroup considers:

The recoverable amount of the asset (or asset’s cash generating unit) is the higher of the fair value less costs to sell and value in
use. Value in use is defined as the present value of the future cash flows before interest and tax obtainable as a result of the asset’s(or asset’s cash generating unit’s) continued use. These cash flows are discounted using a pre-tax discount rate that represents
the current market risk free rate and the risks inherent in the asset.
If the recoverable amount of the asset (or asset’s cash generating unit) is estimated to be lower than the carrying amount, thecarrying amount is reduced to its recoverable amount. An impairment loss is recognised in profit or loss, unless the asset has beenrevalued when the amount is recognised in other comprehensive income to the extent of any previously recognised revaluation.
Thereafter, any excess is recognised in profit or loss.
If an impairment loss is subsequently reversed, the carrying amount of the asset (or asset’s cash generating unit) is increased
to the revised estimate of its recoverable amount, but only to the extent that the revised carrying amount does not exceed thecarrying amount that would have been determined (net of depreciation or amortisation) had no impairment loss been recognised
in prior periods. A reversal of an impairment loss is recognised in profit or loss.

⚫ Contingent events that would change the amount or timing of cash flows;⚫ Terms that may adjust the contractual coupon rate, including variable rate features;⚫ Prepayment and extension features; and⚫ Terms that limit the Group’s claim to cash flows from specified assets (e.g. non-recourse features).
Financial assets at fair value through other comprehensive income
Financial assets in portfolios where the business model is to hold the assets to collect the contractual cash flow or to be sold andwhere those cash flows represent solely payments of principal and interest.
Financial assets measured at fair value through other comprehensive income are initially recognised at fair value plus transaction
costs that are directly attributable to their acquisition and are subsequently measured at fair value.

4.13 Financial Instruments
Recognition of financial assets
Financial assets are recognised when the Group enters into a contract that results in current or future economic value to theGroup. Financial assets are initially measured at fair value and are accounted for on a trade date basis.
Classification and measurement of financial assets
The Group classifies its financial assets at either amortised cost, fair value through profit or loss or fair value through othercomprehensive income.

Unrealised gains or losses, other than loss allowances for expected credit losses, arising from financial investments measured
at fair value through other comprehensive income are reported in equity (in the financial investment reserve) and in othercomprehensive income in the Consolidated Statement of Comprehensive Income, until such investments are sold, collected orotherwise disposed of.
On maturity or disposal of an investment, the accumulated unrealised gain or loss included in equity is recycled to the Consolidated
Statement of Comprehensive Income for the period. Gains and losses on disposal are determined using the fair value of theinvestment at the date of derecognition.
Financial assets at fair value through profit or loss

In order to determine the appropriate classification of non-derivative financial assets, the Group assesses the objective of thebusiness model in which the financial asset is held, and for those measured at amortised cost whether the contractual cash flowsof the financial asset are solely payments of principal and interest ('SPPI').
The Group assesses its business models at a portfolio level based on its objective for the relevant portfolio, how performanceof the portfolio is measured and reported, how management are compensated and the frequency and reasons for asset sales
from the portfolio. Financial assets are reclassified when, and only when, the Group changes its business model for managing
the assets.
Financial assets at amortised cost
Financial assets in portfolios where the business model is to hold the assets to collect the contractual cash flows, and where thosecash flows represent solely payments of principal and interest, are measured at amortised cost.

Financial assets that do not meet the criteria to be measured at amortised cost or fair value through other comprehensive income
are measured at fair value, with changes in fair value recognised within other income in profit or loss in the Consolidated Statementof Comprehensive Income. These financial instruments include derivative financial instruments.
Derecognition
Financial assets are derecognised when the contractual right to receive cash flows has expired or when the Group has transferred
its contractual right to receive the cash flows from the assets and either (i) substantially all of the risks and rewards of ownershiphave been transferred; or (ii) the Group has neither retained nor transferred substantially all of the risks and rewards but has
transferred control.
Impairment of financial assets

Financial assets measured at amortised cost are initially recognised at fair value plus transaction costs that are directly attributable
to their acquisition or issue (with the exception of trade and other receivables with an expected term of less than one year where
the Group applies the practical expedient to recognise these amounts at transaction price), and are subsequently measured atamortised cost using the effective interest rate method, less expected credit loss allowances as stipulated in IFRS 9. Financial
assets at amortised cost include cash and cash equivalents, loans and advances to customers, trade and other receivables,
settlement receivables and amounts recoverable under long term contracts.

In accordance with IFRS 9, the Group recognises impairment loss allowances for expected credit losses ('ECL') on financial
assets that are measured at amortised cost or fair value through other comprehensive income. These include loans andadvances to customers, trade and other receivables, settlement receivables, debt securities and amounts recoverable underlong-term contracts.

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Changes to the IFRS 9 model for impairment of financial assets are approved by the Group Credit Risk Committee or Group
Model Risk Committee depending on the nature of the change. Material changes are escalated to the Group Asset and Liability
Committee and to the Board where applicable.
There are three approaches to recognising ECL provisions under IFRS 9:⚫ The simplified approach — which applies on a mandatory basis to trade receivables and contract assets that do not contain asignificant financing component. It may also be applied on an optional basis to trade receivables and contract assets that docontain a significant financing component or to lease receivables;⚫ The credit-adjusted approach — which applies to assets that are credit impaired on initial recognition (i.e. origination or
acquisition); and⚫ The general approach — which applies to all loans and receivables not eligible for the above two approaches.
All of the Group’s trade receivables are considered to qualify for the simplified approach (as they have terms of less than one year
and therefore do not contain a significant financing component) and therefore on initial recognition an impairment provision isrequired for expected credit losses arising from default events expected to occur over the life of the financial asset ('lifetime ECL').
The Group currently does not have any purchased or originated credit impaired financial assets.
For loans and advances to customers, treasury investments, amounts recoverable on long-term contracts, and amounts due fromother Group companies in the Company financial statements, the general approach to impairment is applied. This follows a threestage model and requires these financial assets to be assigned to one of the following three stages:

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a.

The PD has increased by more than 2.5 times (this would be equivalent to downgrade by approximately two or morenotches according to Revolut’s internal rating scale).

b.

The PD has increased by more than 0.5% in absolute terms (to avoid classification as Stage 2 of obligors still being withlow risk despite a relative PD change exceeding 2.5 times).

SICR indicators in points 1 to 3 above are evaluated at obligor level, while the ones in points 4 and 5 are evaluated at individual
financial instrument level.
For wholesale credit risks, a low-risk exemption applies, such that all investment grade obligors will be allocated to Stage 1. Stage 2
assets will include non-investment grade exposures which have experienced a downgrade by 2 or more notches based Revolut’sinternal rating scale as at the reporting date compared to initial recognition and this results in a PD increase of more than 0.5% in
absolute terms.
Transfers from Stage 2 back to Stage 1 will be performed when none of SICR indicators are present as of the reporting date.
Any changes in the criteria used to determine SICR follow the same approval pathway described for the overall IFRS 9 model.
Definition of default and credit-impaired asset
Assets which are past due by more than 90 days, or where the Group considers it unlikely that the obligor will be able to pay its
obligations, are considered to be in default for IFRS 9. Events that trigger inclusion in default include:⚫ The customer filing for bankruptcy or Individual Voluntary Agreement.
⚫ The customer is deceased.

⚫ Stage 1 – Financial assets which have not experienced a significant increase in credit risk ('SICR') since initial recognition,
against which an expected credit loss provision is required for expected credit losses resulting from default events expected
within the next twelve months (a '12-month ECL') is required on initial recognition — when a financial asset is first recognised it
is assigned to Stage 1;⚫ Stage 2 – Financial assets which have experienced a SICR event since initial recognition, against which a lifetime ECL provision
is required; and⚫ Stage 3 – Financial assets which are credit impaired, for which objective evidence of an impairment exists, and which also
requires a lifetime ECL provision.

⚫ The overdraft or loan has been renegotiated because the customer’s condition has deteriorated. As an example, this includes
cases where a specific repayment plan has been agreed and interest has been frozen.
⚫ The customer has requested ‘breathing space’ (i.e. when the Group agrees to give the customer some time in which they won’t
be contacted about their arrears at all and fees or interest is frozen).
Default status will be applied at an obligor level such that where any one facility is in default, all facilities of that obligor will beconsidered in default.
Calculation of expected credit losses

Interest income on assets in Stages 1 and 2 is recognised using the effective interest rate method on the gross carrying value ofthe assets. For assets in Stage 3, interest income is recognised using the effective interest rate method on the carrying value ofthe assets net of ECL provision.

The expected credit loss provision is calculated using the three following inputs:

Significant increase in credit risk

⚫ Probability of default ('PD') – the likelihood of default within a given time frame, either twelve months (for Stage 1 assets) or
the lifetime of a financial asset (for Stages 2 and 3 assets). PD is determined with reference to internal and external scorecards
based on customer characteristics at origination and are subsequently measured based on client behaviour;

Stage 2 includes financial assets that have had a significant increase in credit risk since initial recognition, but that do not have
objective evidence of being credit impaired.

⚫ Loss given default ('LGD') – the net loss in the event of a default; andFor retail credit risks, Stage 2 includes assets for which any of the following SICR indicators are present as at the reporting date,that were not present at initial recognition:
1.

⚫ Expected balance at default ('EAD') – the gross value of loss in the event of a default. EAD is determined as the gross carrying
amount for drawn balances and a fraction of the available credit based on the utilisation of credit lines for undrawn balances.
The expected credit loss provision on the outstanding financial assets at the date of the Consolidated Statement of Financial
Position is calculated by multiplying the PD (dependent on the stage of the asset) by the LGD and EAD, taking into accountthe contractual period of credit risk exposure from initial recognition in the case of loans. For credit cards, where the exposure
to credit risk is not limited to the contractual period, the expected life is calculated based on the estimated life of the loan andundrawn facility.

Obligors on watchlist status;

2. Obligors on forborne performing status (i.e. forbearance with material concession);
3. Obligors not eligible for forbearance measures based on their risk assessment;
4. Facilities more than 30 days past due; and5. Facilities with a significant increase in lifetime point-in-time forward-looking probability of default ('PD') compared to initialrecognition. This occurs if:
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ECL models incorporate forward-looking information via macroeconomic forecasts and associated overlay factors produced inaccordance with the Group ECL methodology. The process is performed separately for each country of lending. Every quarter,
source macroeconomic forecasts are extracted from multiple providers including but not limited to the Bank of England, the Officefor National Statistics, and the European Central Bank. Forecasts are aggregated in three scenarios:

Non-derivative financial liabilities that are measured at fair value through profit or loss are measured at fair value with changes
in fair value recognised in the Consolidated Statement of Comprehensive Income. These financial instruments include financial
liabilities initially designated as fair value through profit or loss to avoid an accounting mismatch including customer liabilities inrespect of commodities, where the associated assets are accounted for at fair value.

⚫ Baseline

Derivatives, including foreign currency swaps, precious metals swaps, and foreign currency forward contracts, are measured atfair value through profit or loss. Derivatives are initially recognised at fair value on the date a derivative contract is entered into andare subsequently re-measured at their fair value.

⚫ Pessimistic/Upturn⚫ Optimistic/Downturn

Interest expense is charged to the Consolidated Statement of Comprehensive Income using the effective interest rate method.
Each scenario is assigned a weight in accordance with the relative probability of future economic condition development. Weightassignments are selected by experts with reference to the relative severity of the source forecasts and are approved by the Group
Credit Risk Committee prior to incorporation into the final ECL calculation.

Financial liabilities are derecognised when the Group has either discharged the liability through settlement, or where it has beenlegally released from primary responsibility for the liability by process of law or by the creditor.

The forward-looking macroeconomic variables considered in each scenario include:

Reclassification of financial assets and liabilities⚫ Real GDP

The Group does not reclassify its financial assets subsequent to their initial recognition, apart from the exceptional circumstancesin which the Group acquires, disposes of or terminates a business line.

⚫ Inflation (accounted in GDP by using real output instead of nominal)
Offsetting of financial instruments⚫ Unemployment⚫ Interest rates
The scenarios for each variable are compiled into a macroeconomic overlay model which translates initial PD estimates into
scenario-specific estimates, which are used to calculate scenario-specific ECL outputs. The scenario-specific ECL outputs areaggregated using the scenario weights to produce a final ECL estimate for each financial asset.

Financial assets and liabilities are offset, and the net amount is reported in the Consolidated Statement of Financial Position when,and only when, there is a legally enforceable right to offset the recognised amounts with an intention to settle on a net basis, oralternatively to realise the asset and settle the corresponding liability simultaneously. Income and expenses are presented on a net
basis only when permitted by the accounting standards.
Hedge accounting

The expected life assumption used in the computation of ECL is selected based on the maturity of the financial asset. Financial
assets without maturities are assigned an expected life assumption based on the the contractual term of the asset or the maximum
period over which the entity is exposed to credit risk.
Details on the ECL calculation approach are contained in jurisdiction specific methodologies for wholesale and retailcredit exposures.

The Group elected, as a policy choice permitted under IFRS 9, to continue to apply the requirement of IAS 39 Financial Instruments:
Recognition and Measurement for the macro fair value hedges for interest rate risk.
Where derivatives are held for risk management purposes, and when transactions meet the required criteria for documentationand hedge effectiveness, the Group applies fair value hedge accounting, or hedging of a net investment in a foreign operation, as
appropriate to the risks being hedged.

Modification of contractual terms
Where the contractual terms of financial assets are renegotiated or modified and the financial asset was not derecognised, its
gross carrying value is adjusted to reflect the new contractual cash flows discounted at the original effective interest rate with again or loss recognised in the Consolidated Statement of Comprehensive Income.
Write-offs
Financial assets will be written off, either partially or in full, against the related allowance once there is no realistic prospect ofrecovery and the amount of the loss has been determined. Subsequent recovery of amounts written off are recognised against
the amount of impairment losses recognised in the Consolidated Statement of Comprehensive Income.

At inception, the Group formally documents how the hedging relationship meets the hedge accounting criteria. It also records the
economic relationship between the hedged item and the hedging instrument, including the nature of the risk, the risk management
objective and strategy for undertaking the hedge and the method that will be used to assess the effectiveness of the hedging
relationship at inception and on an ongoing basis.
In order to qualify for hedge accounting, a hedging relationship must be expected to be highly effective on a prospective basis andit needs to be demonstrated that it was highly effective in the previous designated period (i.e. one month). A hedge is considered
to be highly effective if the changes in fair value or cash flows attributable to the hedged risk are expected to be offset by thehedging instrument in a range of 80% to 125%. It is also necessary to assess, retrospectively, whether the hedge was highly
effective over the previous one-month period. The hedge accounting documentation includes the method and results of thehedge effectiveness assessments.

Recognition and measurement of financial liabilities
Fair value hedges
Financial liabilities that are not measured at fair value through profit or loss are classified as at amortised cost. Financial liabilities
designated as at amortised cost are initially measured at fair value (net of issue costs in the case of loans and borrowings) andsubsequently measured at their amortised cost using the effective interest rate method. They include loans and borrowings, tradeand other payables, and customer liabilities for e-money in issue and customer deposits.

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The Group currently only applies fair value hedging for interest rate risk. For designated and qualifying fair value hedges, thecumulative change in the fair value of a hedging derivative is recognised immediately in the Consolidated Statement ofComprehensive Income as the net gain on changes in the fair value on hedging derivatives and hedged items, within other income.
In addition, the cumulative change in the fair value of the hedged item attributable to the hedged risk is recognised in the sameline item, and for hedged items that would otherwise be measured at cost or amortised cost, the carrying amount of the hedged
item is adjusted accordingly.
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In these hedging relationships, the main sources of ineffectiveness are:4.16 Investment in Commodities⚫ the effect of the counterparty and the Group’s own credit risk on the fair value of the interest rate swaps, which is not reflectedin the fair value of the hedged item attributable to the change in interest rates;

These investments represent holdings in precious metals that are held to hedge the Group’s exposure to movements in commodity
prices on its customer contracts. As these investments are not held for sale in the ordinary course of business, in the process of
production for such sale, or in the form of materials or supplies to be consumed in the production process or in the rendering ofservices, they are not considered to meet the definition of inventory.

⚫ differences in the magnitude or timing of future expected cash flows in the hedged item and hedging instrument; and⚫ the ongoing amortisation of any existing balance sheet mismatch between the fair value of the hedged item and the hedging
instrument.
If hedge relationships no longer meet the criteria for hedge accounting, hedge accounting is discontinued. For fair value hedges
of interest rate risk, the fair value adjustment to the hedged item is amortised to profit or loss over the period to maturity of thepreviously designated hedge relationship using the effective interest method. If the hedged item is sold or repaid, the unamortised
fair value adjustment is recognised immediately in profit or loss.

Accordingly, they are classified as other current asset investments in the Consolidated Statement of Financial Position, and as they
are highly liquid assets, which are frequently traded in an active market, with an observable market price, the Group’s accounting
policy is to account for these investments at fair value through profit or loss. The fair value gains and losses on investments incommodities are recognised in revenue along with the corresponding fair value gains and losses on the associated customer
liability (see Note 4.20).

4.17 Trade and Other Receivables and Payables

Hedges of net investment in foreign operation
The Group’s net investments in foreign operations, including monetary items accounted for as part of the net investment, arehedged for foreign currency risks using derivatives.
The effective portion of the gain or loss on the hedging instrument is being recognised directly in other comprehensive income andthe ineffective portion being recognised immediately in profit or loss. The cumulative gain or loss recognised in other comprehensive
income is recognised in profit or loss on the disposal or partial disposal of the foreign operation, or other reductions in the Group’s
investment in the operation.

Collateral
Where cash collateral is given, to mitigate the risk inherent in amounts due from the Group, it is included as an asset in trade andother receivables. Cash collateral includes amounts held with our partners on a long-term basis to support customers' transaction
volumes.
Card schemes
Card schemes include rebates due to the Group arising from credit card scheme and processing fees.

4.14 Investments in Subsidiaries

Settlement receivables and payables

Parent company investments in subsidiary undertakings are initially recognised at cost. Subsequently, investments in subsidiary
undertakings are stated at cost less provision for impairment. An investment in a subsidiary is deemed to be impaired when its
carrying amount is greater than its estimated recoverable amount, and there is evidence to suggest that the impairment occurred
subsequent to the initial recognition of the asset in the consolidated financial statements. All impairments are recognised in theConsolidated Statement of Comprehensive Income as they occur. The carrying cost is reviewed at each Consolidated Statementof Financial Position date by reference to the income that is projected to arise there from.

Settlement receivables and payables include balances arising from timing differences in the Group’s settlement process between
the cash settlement of a transaction and the recognition of the associated liability (for example, customer liabilities e-money
in issue). When customers fund their e-money account using their bank account, or a credit or debit card, or sell stocks or
cryptocurrencies via our trading and cryptocurrency exchange partners, there is a clearing period before the cash is received or
settled. This period is usually within five business days.

When the Company acquires a Revolut investee entity transferred from another Revolut group company, the Company recognises
as the cost of investment in the investee entity at the transferring entity’s book value (‘carry-over basis’) as the investee entity has
only moved within the Revolut group. Any difference between the consideration paid and the capital of the acquiree is reflected ina merger reserve within equity.

As the Group acts as an agent on behalf of its customers on a custodian basis to buy or sell cryptocurrencies and listed company
shares, the Group does not recognise positions in cryptocurrencies or shares on the Consolidated Statement of Financial Position.

Where the Company transfers ownership of a Revolut investee entity to another Revolut group company, the disposal is treatedas an in-substance demerger rather than a loss of control in the scope of IFRS 10 as the investee entity has only moved within the
Revolut group. Any difference between the book value derecognised, and the consideration received is reflected in equity by theCompany as a distribution made or contribution received.

Trade receivables are amounts owed to the Group from business partners following the provision of services on credit.

4.15 Cash and Cash Equivalents

Negative customer balances represent customers with overdrawn electronic money balances net of impairment loss allowancesfor expected credit losses.

Trade receivables and payables

Trade payables are any unsettled expenses billed to the Group from vendors, suppliers or other third parties for services provided.
Negative customer balances

Cash is represented by cash in hand and deposits with central banks and financial institutions repayable without penalty on noticeof not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the dateof acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

4.18 Inventories

In the US, e-money services are provided through partnerships with authorised credit institutions to provide the consumer
protection, and the client funds and the associated customer liability are held on the statement of financial position of the relevant
financial institution, and therefore are not recognised on the Group’s Consolidated Statement of Financial Position.

Inventories are stocks of cards for new and existing users as well as card readers which are held at the Group’s fulfilment partner
warehouses. Inventories are stated at the lower of cost (adjusted for loss of service potential if applicable) and net realisable value('NRV' or replacement cost). Inventories are recognised as an expense when the card or card reader is shipped to a customer.

Revolut Annual Report 2022

112

Revolut Annual Report 2022

113

Notes to the Consolidated Financial Statements

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

Cost is determined using the weighted average cost to produce, including taxes and duties and transport and handling directly
attributable to bringing the inventory to its present location and condition.
At each Consolidated Statement of Financial Position date, inventories are assessed for impairment. If inventory is impaired, thecarrying amount is reduced to its selling price less costs to complete and sell and the impairment loss is recognised immediately
in profit or loss. Where a reversal of the impairment charge is required the impairment charge is reversed, up to the original
impairment loss, and is recognised as a credit in profit or loss.

Notes to the Consolidated Financial Statements

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

4.21 Share Capital
Ordinary shares are classified as equity. Incremental costs that are directly attributable to the issue of new ordinary shares or
options are shown in equity as a deduction, net of tax, from the proceeds.
Shares held by trusts
Shares in the Company that are held by the Employee Benefit Trust (‘EBT’) are treated as ‘own shares’ or treasury shares. Shares areheld and purchased by the EBT for delivery to employees under the employee incentive plans. Purchased shares are recognised
as a deduction from equity at the price paid for them.

4.19 Provisions and Contingencies
Provisions

4.22 Reserves
Provisions are made where an event has taken place that gives rise for the Group to a legal or constructive obligation that probably
requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense in the Consolidated Statement of Comprehensive Income in the year that the Group
becomes aware of the obligation and are measured at the present value of the expenditures expected to be required to settle theobligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the
obligation. The increase in the provision due to passage of time is recognised as an interest expense.
When payments are eventually made, they are recognised as a reduction in the provision carried in the Consolidated Statementof Financial Position.

The Group and Company reserves are as follows:⚫ Merger reserve arising from the reorganisation of the Group⚫ Other reserves represent the revaluation of foreign currency at the Consolidated Statement of Financial Position date,cumulative share-based payments charges, gains and losses recognised upon corporate hedging activities, unrealised gains
and losses on financial instruments at fair value through OCI, the cost of shares held for awards granted to employees, and theimpact of taxes for any of the above items⚫ Retained earnings or accumulated deficit, as applicable, represent cumulative profits or losses, net of dividends paid toshareholders, and any other adjustments

Contingencies
Contingent liabilities are not recognised, except those acquired in a business combination. Contingent liabilities arise as a resultof past events when (i) it is not probable that there will be an outflow of resources or that the amount cannot be reliably measured
reliably at the reporting date or (ii) when the existence will be confirmed by the occurrence or non-occurrence of uncertain future
events not wholly within the group’s control.
Contingent liabilities are disclosed in the consolidated financial statements unless the probability of an outflow of resources
is remote.
Contingent assets are not recognised. Where an inflow of economic benefits from a contingent asset is probable, it is disclosed
in the notes to the consolidated financial statements.

4.20 Customer Liabilities
E-money in issue
The Group recognises a liability upon the issue of electronic money to its customers equal to the amount of electronic money thathas been issued.
Customer deposits
The Group recognises a liability to customers when a customer makes a deposit. This liability is initially recognised at fair value andsubsequently measured at amortised cost using the effective interest rate method.
Commodities
Customer liabilities in respect of contracts relating to the commodities offering are financial liabilities with an embedded derivative.
The Group’s accounting policy is not to separate the embedded derivative and to measure the entire instrument at fair value
through profit or loss.
Revolut Annual Report 2022

114

Revolut Annual Report 2022

115

Notes to the Consolidated Financial Statements

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

Notes to the Consolidated Financial Statements

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

Investment in subsidiaries (Company only)

5. Judgments in Applying Accounting Policies and Key Sourcesof Estimation Uncertainty
Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectationsof future events that are believed to be reasonable under the circumstances.
Critical judgments in applying the Group’s accounting policies

The carrying value of investments in subsidiaries requires management to select an appropriate discount rate and terminal growthrate for the valuation of future cash flows in assessing each investment for impairment. The key assumptions used in making thisassessment and the sensitivity analysis of the impact of varying these assumptions are disclosed in Note 14.
Hedge accounting
The Group’s hedge accounting policies include an element of judgment and estimation, in particular, in respect of the projected
portfolio repricing time bucket of the underlying non-maturing core customer deposits in the macro fair value hedges.

Recognition of deferred tax asset
The Group has substantial carried forward tax losses. Where carried forward tax losses can be utilised against future taxable
profits, a deferred tax asset should only be recognised to the extent that it is probable that there will be sufficient taxable profits
against which it can be recovered. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is
no longer probable that the related tax benefit will be realised; such reductions are reversed when the probability of future taxable
profits improves.
Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that it has become probablethat future taxable profits will be available against which they can be used.
Management regularly evaluates whether deferred tax assets can be realised. In evaluating whether deferred tax assets canbe realised, management considers projected future taxable income and the scheduled reversal of deferred tax liabilities. Thisevaluation requires significant management judgment, primarily with respect to projected taxable income. The future taxable
income can never be predicted with certainty. It is derived from budgets and strategic business plans but is dependent on numerous
factors, some of which are beyond management’s control. Substantial adverse variance of actual results from estimated futuretaxable profits, or changes in our estimate of future taxable profits, could lead to changes in deferred tax assets being realisable,or considered realisable, and would require a corresponding adjustment to the amount of the deferred tax asset that is recognised.

Core deposits within the identified portfolios are allocated to repricing time buckets based on expected, rather than contractual,
repricing dates. The repricing dates are estimated at the inception of the hedge and throughout the term of the hedge, based on
historical experience and other available information, including information and expectations regarding interest rates, withdrawal
rates, and the interaction between them.
The estimates are reviewed periodically and updated in the light of experience, and it will influence the availability and timing ofsuitable hedged items, with an impact on the effectiveness of the hedge relationships.
Additionally, for the portfolio fair value hedges of the Group’s core deposits portfolio, the Group follows a dynamic hedging
strategy, and the period for which the Group designates these hedges is only one month. At the end of every month, the Group
voluntarily de-designates the hedge relationships and re-designates them as new hedges. The one-month repricing time period
duration is deemed to be most appropriate in order to minimise the ineffectiveness and accommodate new exposures.

6. Fee Income
Group

Deferred tax assets of £93.7 million were recognised as at 31 December 2022 in the UK tax group (2021: £1.8 million).
The Group has considered their carrying value as at 31 December 2022 and concluded that, based on management’s estimates,
sufficient taxable profits will be generated in future years to recover recognised deferred tax assets. These estimates are basedon forecast performance and take into account the continued profitability of the existing business as well as its continued growthin 2023 and beyond. Management expects to utilise all deferred tax assets in respect of accumulated trading tax losses before
the end of 2023.
Deferred tax assets of £13.9 million (2021: £87.1 million) have not been recognised in respect of tax losses and other temporary
differences where the availability of future taxable profits, for some entities within the group, is uncertain. Further details about theGroup’s deferred tax assets are given in Note 11.

2022

2021

£000

£000

Cards and interchange

306,311

149,354

Foreign exchange and wealth269,967

348,574

Subscriptions

158,701

107,268

Other

57,59430,850Total fee income

792,573

636,046

Transferred at a point in time622,651

528,082

Transferred over time

169,922

107,964

Total fee income

792,573

636,046Nature of fee income

Type of fee income

Key accounting estimates and assumptions
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom
equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to thecarrying amounts of assets and liabilities within the next financial year are addressed below.
Share-based payments
The estimate of share-based payments costs requires management to select an appropriate valuation model and make appropriate
estimations of share forfeiture rates. Further explanation is contained in Note 27.

Revolut Annual Report 2022

116

Revolut Annual Report 2022

117

Notes to the Consolidated Financial Statements

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

Notes to the Consolidated Financial Statements

Remaining performance obligations

1

2

3

4

5

6

7

8

9

10

11

Group

14

15

16

2022

2021

£000

£000

Net yield on foreign exchange derivatives

39,877

159

Net gain on changes in the fair value of hedging derivatives and hedged items

7,408

—

Total other income

47,285159

The Group determines the disaggregation of total fee income by major geographical area based on customer address.

2022

2021

£000

£000

United Kingdom

237,328

195,885

Europe (excluding United Kingdom)536,574

432,706

Rest of the world

18,671

7,455

Total fee income

792,573

636,046

9. Administrative Expenses
Group

7. Interest Income and Expense
Group

13

8. Other Income

Due to the nature of its commercial arrangements, the Group does not have any material remaining performance obligations
related to contracts with duration over one year.

Geographical markets

12

2022

2021*

£000

£000

361,872

218,957

Advertising and marketing

129,295

51,599Outsourced support

38,026

16,063

Total staff costs

Note

10

2022

2021

IT and communications

30,281

17,143£000£000

Legal and professional costs

28,903

15,978Premises-related costs

9,752

9,457

9,102

9,079

819

7,278

Interest income

Depreciation and amortisation expense

19 , 20

Cash and bank balances

24,372

14

Interest accretion on financial investments

35,972692

Impairment losses other than expected credit losses

Interest on loans and advances to customers

7,728

564

Other costs

59,026

34,511

Interest income on customer funds

14,019329

Total administrative expenses

667,076

380,065

Total interest income using EIR method

82,091

1,599

Other interest income

598

127

Total interest income

82,6891,726

The (loss)/profit before tax of the Group are stated after charging the following individual expenses, which are to be disclosed
separately.

Interest expense
Negative interest on customer funds(15,505)(16,984)—(3,190)

(550)

(859)

(16,055)(21,033)

Other interest expense

(10)

7

Total interest expense(16,065)(21,026)

Other borrowed funds
Interest expense on lease liabilities
Total interest expense using EIR method

Net interest income / (expense)

66,624(19,300)

The incremental borrowing rate of the Group is used to calculate the initial measurement of lease liabilities at the inception of
the lease.

Revolut Annual Report 2022

*The presentation of staff costs has been modified, as disclosed in Note 2.3.

118

Group

2022

2021**£000£000

87,95458,72052

176

Depreciation of property, equipment, and right-of-use assets

9,050

8,903

Inventory recognised as expense

22,294

16,156

Operating lease costs

2,711

3,062

Impairment of acquired intangible assets* and other non-financial assets

819

7,278

Research and development charged as an expense
Amortisation of intangible assets*During 2021, Revolut Ltd acquired all the issued share capital of Global Retail Technology Limited ('Nobly') a developer of theelectronic point of sale (ePOS) system for the total consideration of £7.4 million, including £2.6 million as a non-cash element.
The Group has not treated this as a business combination; instead, it recognised acquired software and subsequently impaired
the related cost to nil due to the delays with integration of the acquired technology into the existing Group’s infrastructure.

Revolut Annual Report 2022

119

Notes to the Consolidated Financial Statements

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

Notes to the Consolidated Financial Statements**Operating lease costs has been restated in order to exclude the expense associated with provisions for dilapidation.

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

*The average monthly number of employees (previously reported as 4,655) has been restated to more accurately reflect thequantity and timing of employment status changes throughout the year ended 31 December 2021.

During the year the Group (including its overseas subsidiaries) obtained the following services from the Group’s auditors.
The increase in headcount reflects the continued investment in growth and capability throughout the business, including enhancing
the Group’s Risk, Compliance, and Control functions.
Group

2022

2021

£000

£000

3,950

3,351

Fees payable for the audit of the Company’s subsidiaries

291

776

Fees payable to the Company’s auditors with respect of the prior year—

225

Fees payable to the Company’s auditor for other assurance services

49

111

Fees payable for the audit of the Company and Group’s financial statements

10. Staff Costs

10.1. Directors’ remuneration

Group

2022

2021*

£000

£000

Director emoluments

1,108

652

Share-based payments

18,621

10,361

215

34

2

3

19,946

11,050Social security costs and other benefits
Contributions to defined contribution pension schemes

Group

2022

2021*

£000

£000

Wages, salaries, and bonuses

249,581

138,775

Share-based payments

39,04947,352Social security costs

32,711

16,494

Professional employer organisation costs

10,5802,973

Cost of defined contribution scheme

5,687

3,733

Staff recruitment costs

5,152

2,540

Other staff costs

19,112

7,090

Total staff costs

361,872

218,957*Wages, salaries, and bonuses (previously reported as £136.7M), professional employer organisation costs (previously reported as£nil), staff recruitment costs (previously reported as £nil), and other staff costs (previously reported as £nil) have been restated tomore accurately reflect the personnel related costs incurred throughout the year ended 31 December 2021.

Total Directors' remuneration*The amount of share-based payments expense incurred in respect of Directors (previously reported as £3.1 million) and social
security costs made to Directors (previously reported as £nil) have been restated to include additional compensation and otherpayroll benefits remitted to investment vehicles controlled by Directors, which more accurately represents the aggregate value ofcompensation fairly received or receivable by Directors.
From April 2020 until May 2021, the Non-Executive Directors agreed to forego their cash remuneration in exchange for compensationin the form of shares in the Company. In 2022, no Directors (2021: five Directors) received compensation in the form of shares in
the Company.
During the year, one Director (2021: none) exercised share options during the year for a gain of £1.2 million (2021: £nil). See Note 27
for further details.

Group

2022

2021*

£000

£000

Director emoluments

100

100

Share-based payments

17,693

10,14613

917,806

10,255Highest paid Director

The Company had £nil staff costs in the year ended 31 December 2022 (2021: £nil).
The number of employees for the Group as at 31 December 2022 is 5,913 (2021: 2,795). The average monthly number of employees,
including the Executive Directors, during the year was as follows.

Social security costs and other benefits
Total compensation for highest paid Director

Group

2022

2021*

No.

No.

Customer operations

1,440

648

Corporate functions

1,334

825

Products

1,170

672

Sales

495

134

Regions

216

84

2

2

4,657

2,365

Executive Directors
Total average number of employees

Revolut Annual Report 2022

120

*The amount of share-based payments expense incurred in respect of the highest paid Director (previously reported as £nil) has
been restated to include additional compensation remitted to investment vehicles controlled by Directors, which more accurately
represents the aggregate value of compensation fairly received or receivable by this Director. This resulted in a change to theindividual Director who is considered to be highest paid in aggregate; all comparative information was restated accordingly.

Revolut Annual Report 2022

121

Notes to the Consolidated Financial Statements

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

Notes to the Consolidated Financial Statements

1

2

3

4

11. Taxation

11.3. Tax on items not recognised in profit or loss statement

11.1. Income tax expense

Group

Group

2022

2021

£000

£000

Current tax at 19% (2021:19%) on the profit/ loss for the year

2,904

3,833

Overseas tax for the year

11,49910,702971

138

15,374

14,673(4,251)(924)(42,268)

—

(75)

—

—

(298)

Total deferred tax/(credit)(46,594)(1,222)

Total tax (credit)/expense(31,220)

13,451

UK corporation tax

Adjustment in respect of previous years
Total current tax charge

5

6

7

8

9

10

11

12

13

14

15

16

2022

2021

£000

£000

Share-based payments(1,249)—Total current tax not recognised in consolidated statement of comprehensive income(1,249)—(37,550)—

Losses and other deductions(4,565)—(Gains)/losses on financial assets at fair value through OCI(3,444)—

Total deferred tax not recognised in consolidated statement of comprehensive income(45,559)—

Current tax (credit)/charge on:Deferred tax (credit)/charge on:
Share-based payments

Deferred tax
Current year credit recognised
Previously unrecognised deferred tax
Adjustments in respect of previous periods
Impact of change in tax rates

11.4 Deferred tax
The following tables show deferred tax recorded in the Consolidated Statement of Financial Position and changes recorded in tax(credit)/expense.
The amounts are different from those disclosed on the Consolidated Statement of Financial Position as they are presented before
offsetting asset and liability balances where there is a legal right to set-off and an intention to settle on a net basis.

11.2. Reconciliation of effective tax rate

31 December 2022

The tax assessed in each year differs from the standard rate of corporation tax in the UK for the relevant year. The differences are
explained below:

Group

Group

(Loss)/profit before tax
Tax calculated at UK tax rates applicable of 19% (2021: 19%)

£000

£000

£000

£000

£000

Financial assets at fair value through OCI

3,444

—

—

3,444

—

—

9,858

—

37,550£000£000

Deferred compensation

611

—

611

—

—

(25,418)

39,791

Fixed asset differences(4,829)7,560—

Foreign exchange

661—

Impact of changes in tax rates

—

(299)

896

138

(2,459)(3,190)

Tax provisions

451—

Losses and other temporary difference—(4,031)

Deferred tax not recognised

9,189

6,951

Total tax (credit)/expense(31,220)

13,451

Revolut Annual Report 2022

Equity47,408(42,268)

Differences in overseas tax rates and overseas tax credits

OCI

Share-based payments

6,322

Adjustments in respect of previous periods

Incomestatement

2021

7,139

Recognition of previously unrecognised deferred tax

Deferred tax
liabilities

2022

Effects of:
Expenses not deductible for tax purposes

Deferred tax
assets

122

—

(396)

(157)

—

—

Other temporary differences

4,853

—

4,384

—

—

Losses and other deductions

37,764—31,898

—

4,565

Total

94,080(396)

46,594

3,444

42,115

Deferred tax
assetsDeferred tax
liabilities

Incomestatement

OCI

Equity

£000

£000

£000

£000

£000

Financial assets at fair value through OCI

—

—

—

—

—

Share-based payments

—

—

—

—

—

Deferred compensation

—

—

—

—

—

Fixed asset differences

—

(243)

(113)

—

—

482

—

190

—

—

31 December 2021
Group

Other temporary differences
Losses and other deductions

1,301

—

1,145

—

—

Total

1,783

(243)

1,222

—

—

Revolut Annual Report 2022

123

Notes to the Consolidated Financial Statements

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

Reconciliation of deferred tax asset

Notes to the Consolidated Financial Statements

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

The UK tax losses do not have a time period by which they will expire.
Lithuania

Group

2022

2021

£000

£000

1,540

326

(9)

—

Deferred tax (expense)/credit recognised in profit or loss

46,594

1,214

Deferred tax (charge)/credit recognised in OCI

3,444

—

Deferred tax (charge)/credit recognised directly in equity

42,115—Net deferred tax asset/(liability) at 31 December 2022

93,684

1,540

Net deferred tax asset/(liability) as at 1 January 2022
Adjustments in respect of previous periods

The Group continues to recognise Lithuanian deferred tax assets of £4.9 million, including on carried forward losses, fair value
movements on securities and derivative financial instruments, based on their value at 31 December 2022. These are measured at
the statutory Lithuanian corporate tax rate of 20%.
The Lithuanian tax losses do not have a time period by which they will expire.

12. Cash and Cash Equivalents
Group

31 December 2022

31 December 2021

£000

£000

Own cash and cash equivalents

6,844,860

1,372,727

Restricted cash held at central banks and other banks in respect of customers

3,593,408

5,479,883

142,151—599

199,999

10,581,018

7,052,609

Unrecognised deferred tax asset

Group

2022

2021

£000

£000

Revaluations of financial assets at fair value through OCI—

64

Share-based payments

321

43,400Social security and other employment costs

44

260

Accelerated depreciation for tax purposes

7842

Other temporary differences

71

2,182

Losses available for offsetting against future taxable income

13,48140,362

Unrecognised deferred tax asset/(liability) at 31 December 2022

13,924

87,110Restricted term deposits held in respect of customers classified as cash equivalents
Term deposits classified as cash equivalents
Total cash and cash equivalents

The Company does not have any cash and cash equivalents as at 31 December 2022 (2021: £nil).
Own cash and cash equivalents represent the Group’s own funds held for liquidity requirements, including cash from customer
deposits, and its own operating cash balances for general corporate purposes.
Restricted cash held at central banks and other banks and term deposits held in respect of customers includes safeguarded
funds related to the Group’s regulated e-money services. In the UK, client funds with respect to e-money services are held insegregated accounts with authorised credit institutions as part of the Group’s safeguarding policy. In other jurisdictions the funds
are held separately from the Group’s own cash resources and are safeguarded through the provision of a bank guarantee from athird-party authorised credit institution.

The Company recognised a deferred tax asset as at 31 December 2022 of less than £0.1 million (2021: £nil).
Factors that may affect future tax changes
The main rate of corporation tax in the UK has been 19% since 1 April 2017. Neither the Company nor the Group is subject to the
UK banking surcharge.
On 24 May 2021, the date of substantive enactment, an increase in the UK corporation tax rate from 19% to 25% will be applicablefrom 1 April 2023. On 14 October 2022, and again on 17 November 2022 in the Chancellor's Autumn Statement, the UK Government
reiterated this.
Recognition of deferred tax asset and tax losses carried forward
UK

The Group has decided to safeguard a portion of the funds in respect of customers in the form of bonds which are disclosed in
Note 13.
Not included in restricted cash held at central banks and other banks in respect of customers are balances related to the provisionof e-money services in the US. These services are provided through partnerships with authorised credit institutions to provide
consumer protection. In this arrangement, the client funds and the associated customer liability are not recognised on the Group’s
Consolidated Statement of Financial Position and rather are held on the statement of financial position of the relevant partnershipcredit institution. There is no material impairment recognised on the carrying value of cash and cash equivalents as amounts
placed are with institutions rated BB+ or above and have immaterial probability of default.

The Group has recognised UK deferred tax assets of £88.7 million, including on carried forward losses and share based paymentsin the period for the first time, based on their value at 31 December 2022. In assessing the probability of recovery, the Group hasrelied upon a recent history of UK taxable profits, together with the Group’s three-year plan that has been used for the Going
Concern assessment, and which demonstates positive profit forecasts throughout the remainder of the forecast period.
Those UK deferred tax assets and liabilities, which are expected to unwind after 1 April 2023, have been measured in the current
reporting period based on the increased UK corporation tax rate (25%, time apportioned where required) and reflected accordingly
in the Consolidated Statement of Comprehensive Income and Consolidated Statement of Changes in Equity, as this is the rate thathas been substantively enacted as at 31 December 2022.
Revolut Annual Report 2022

124

Revolut Annual Report 2022

125

Notes to the Consolidated Financial Statements

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

1

2

Group

Note

Financial assets measured at FVOCI

Source of funds

Government bonds - held to collect and sell

Restricted cash heldat central banks andother banks in respectof customers

28.2

31 December 2022

31 December 2021

£000

£000

1,712,292

1,236,481

Financial assets measured at amortised cost
Own funds

28.3

Total treasury investments

982,367
2,694,659

6

7

8

9

10

11

12

13

14

15

16

Class ofshare

Principal activity

Registered address

Effective
interest
held

Revolut NewCo UK Ltd

Ordinary

Dormant atreporting date

7 Westferry Circus, Canary Wharf, London, England, E14 4HD

100%

Revolut Ltd

Ordinary

Technology
services, financial
Services

7 Westferry Circus, Canary Wharf, London, England, E14 4HD

100%

Revolut HoldingsInternational Ltd

Ordinary

Holding company

7 Westferry Circus, Canary Wharf, London, England, E14 4HD

100%

Revolut Holdings US Inc.

Ordinary

Holding company

1209 Orange Street, Wilmington DE, 19801
County of New Castle, Delaware

100%

Revolut FIC Ltd (formerly
Revolut Digital Assets Ltd)

Ordinary

Dormant atreporting date

7 Westferry Circus, Canary Wharf, London, England, E14 4HD

100%

Revolut Technologies Inc*

Ordinary

Payment services

1209 Orange Street, Wilmington DE, 19801
County of New Castle, Delaware

100%

Revolut Securities Inc.*

Ordinary

Broker-dealer for
trading services

1209 Orange Street, Wilmington DE, 19801
County of New Castle, Delaware

100%

Revolut Technologies
Russia LLC*

Ordinary

Dormant atreporting date

125047, Moscow, Butyrskiy Val street, bld. 10, office 05-155 Total

100%

Revolut Technologies
Poland Sp z o.o*Ordinary

Currently inliquidation

Konfederacka 23/1 30-306 Kraków-Podgórze

100%

Revolut Technologies
Limited*Ordinary

Dormant atreporting date

13/F, Gloucester Tower, The Landmark, 15 Queen's Road Central, Central,
Hong Kong

100%

Revolut Technologies
Ukraine LLC*

Ordinary

Softwaredevelopment

Ukraine, 03038, Kyiv city, Mykola Hrinchenko str., Building 4

100%

RT Digital Securities Cyprus
Ltd*

Ordinary

Non-operational

Pikioni, 10 Flat/Office 5, 3075, Limassol, Cyprus

100%

Revolut Trading Ltd*

Ordinary

Security dealing
activities

7 Westferry Circus, Canary Wharf, London, England, E14 4HD

100%

Revolut Trading Nominees
Ltd*

Ordinary

Dormant atreporting date

7 Westferry Circus, Canary Wharf, London, England, E14 4HD

100%

Global Retail Technology
LLC*

Ordinary

Softwaredevelopment

The Corporation Trust Company 1209 Orange Street Wilmington, DE
19801

100%

Global Retail Technology
Limited*Ordinary

Softwaredevelopment

7 Westferry Circus, Canary Wharf, London, England, E14 4HD

100%

Revolut Technologies S.A.*

Ordinary

Dormant atreporting date

19 rue du Bitbourg 1273 Luxembourg

100%

Revolut Operations India
Private Limited*

Ordinary

Business
Development

912, Sureshwari Techno IT Park, Village Eskar, Link Road, Borivali West,
Mumbai, Mumbai City, Maharashtra, India, 400092

100%

Ultimately Limited*

Ordinary

Dormant atreporting date

Trinity Chambers, PO Box 4301, Road Town, Tortola, British Virgin Islands

100%

Revolut Holdings Europe
UAB*

Ordinary

Holding company

Konstitucijos ave. 21B, Vilnius, LT-08130

100%

1,236,481

During 2022, a portfolio of held to maturity debt securities were purchased using own funds. These debt securities are held at
amortised cost, owing to the way that the portfolio is managed, and in particular management’s intention to not trade these bonds
but hold these bonds until maturity.

14. Investments in Subsidiaries£000

Cost or valuation
At 1 January 2021—

Additions—

At 31 December 2021—
14,165

Reorganisation

1,299,523

At 31 December 2022

1,313,688

Net book value
At 31 December 2022

1,313,688

At 31 December 2021—

The increase in investments in subsidiaries was due to a group reorganisation which took place during the year, as set out in Note
2.1, following which Revolut Group Holdings Ltd became the new ultimate parent of the Group. When the Company’s investments in
subsidiary companies are not supported by their net assets, the Company assesses the net present value of the future cash flowsof the subsidiary. Where this occurs, management forecasts of the subsidiaries' financial performance are extrapolated to produce
a terminal value. Financial performance over the first five years are consistent with the forecasts prepared by management. Terminal
values are calculated from the year five cash flows with a 3% terminal growth rate applied.

Revolut Annual Report 2022

5

Company—

Government bonds — held to collect and sell — represent holdings in investment in High Quality Liquid Assets ('HQLA'). These
investments are accounted for at fair value through other comprehensive income ('FVOCI'). Restricted bonds held in respect ofcustomers represent safeguarded funds related to the Group’s regulated e-money services.

Additions4

The list of subsidiary undertakings of the Group as at 31 December 2022 is set out below. All trading subsidiary undertakings areincluded in the consolidation.

The Company does not have any treasury investments as at 31 December 2022 (2021: £nil).

Company3

The Directors consider the carrying value of the Company’s investments to be supported by either the net assets or net present
value of future cash flows and therefore there was no impairment within the Company for the year ended 31 December 2022 (2021:£0.54 million).

13. Treasury Investments

Bonds with government and financial institutions– held to collectNotes to the Consolidated Financial Statements

126

Revolut Annual Report 2022

127

Notes to the Consolidated Financial Statements

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

Ordinary

Security dealing
activities

Konstitucijos ave. 21B, Vilnius, LT-08130

100%

Revolut Insurance Europe
UAB*

Ordinary

Insurance
Intermediary

Konstitucijos ave. 21B, Vilnius, LT-08130

100%

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

The following entities were struck off during 2022:⚫ Revolut Holdings Europe Limited — non-operating holding company. Registered address: Matheson, 70 Sir John Rogerson's
Quay, Dublin 2, Ireland

Revolut Bank UAB*
(formerly Revolut
Technologies UAB andmerged with Revolut
Payments UAB)

Ordinary

Deposits
acceptance andconsumer lending

Konstitucijos ave. 21B, Vilnius, LT-08130

100%

Revolut Travel Ltd

Ordinary

Insurance
Intermediary

7 Westferry Circus, Canary Wharf, London, England, E14 4HD

100%

Revolut Australia NOHC
Pty Ltd*

Ordinary

Holding company

Level 8, 222 Exhibition Street, Melbourne VIC 3000

100%

Revolut Payments Australia
Pty Ltd*

Ordinary

Financial services

Level 8, 222 Exhibition Street, Melbourne VIC 3000

100%

Revolut Payments New
Zealand Pty Ltd*

Ordinary

Dormant atreporting date

Level 8, 222 Exhibition Street, Melbourne VIC 3000

100%

Ordinary

Payments
services, e-money
issuance andinsurance
brokerage

30 Cecil Street, #19-08, Prudential Tower, S049712⚫ Revolut Securities Europe Limited — non-operating. Registered address: Matheson, 70 Sir John Rogerson's Quay, Dublin 2,
Ireland⚫ Revolut Payments Ireland Limited — non-operating. Registered address: Matheson, 70 Sir John Rogerson's Quay, Dublin 2,
Ireland
Global Retail Technologies Limited, which is 100% owned by the Group, is not subject to an audit by virtue of s479A of theCompanies Act 2006 relating to subsidiary companies.
Branches
Revolut Ltd conducts business through branches in Ireland, Germany, Lithuania, Poland, Portugal, Romania and France. The
following branches were in existence as at 31 December 2022:

100%⚫ Revolut Ltd (Sp z o.o.) Oddzial w Polsce. Registered address: Podium Park, Jana Pawła, 43a, Krakow, 31-864, Polska⚫ Revolut Ltd - Sucursal em Portugal. Registered address: Avenida Menéres 612, 4450-189 Matosinho, Portugal

Revolut Securities
Singapore Pte. Ltd.*

Ordinary

Trading services

30 Cecil Street, #19-08, Prudential Tower, 049712

100%

Revolut Technologies Ltd*

Ordinary

Dormant atreporting date

Suite 2300, Bentall 5, 550 Burrard Street
Vancouver, British Columbia V6C 2B5100%

Revolut Payments India
Private Limited*

Ordinary

Business
Development

1B - 1003, Parinee Crescenzo G Block BKC, Bandra Kurla Comple, Bandra
East Mubai, Maharashtra MH400051

100%

Arvog Forex Private
Limited*Ordinary

Foreign exchange
trading

A/7 BHARAT NAGARGRANT ROAD MUMBAI MH 400007 IN

99.99%

Ordinary

Payments
services, e-money
issuance andinsurance
brokerage

Room number ("3F, 310"), 106-0032 ARK Hills South Tower, 1-4-5
Roppongi, Minato-ku, Tokyo 106-0032

100%

Revolut Securities Japan,
Inc*

Ordinary

Licenceapplication inprogress for
trading services

Room number ("3F, 310"), 106-0032 ARK Hills South Tower, 1-4-5
Roppongi, Minato-ku, Tokyo 106-0032

100%

Revolut Holdings Mx SA
de CV*

Ordinary

Holding company

Avenida Paseo de las Palmas 405, Int. 1702 Miguel Hidalgo, Lomas deChapultepec, 11000, Ciudad de Mexico

100%

Revolut de Mexico SA deCV*

Ordinary

Business
Development

Avenida Paseo de las Palmas 405, Int. 1702, Miguel Hidalgo, Lomas deChapultepec, 11000, Ciudad de Mexico

100%

Revolut Servicios a la
Tecnologia Mexico SA deCV

Ordinary

Technology
services

Avenida Paseo de las Palmas 405, Int. 1702, Miguel Hidalgo, Lomas deChapultepec, 11000, Ciudad de Mexico

100%

Revolut Tecnologia Brasil
LTDA*

Ordinary

Business
Development

Rua Manoel da Nóbrega, 1280, 10th floor, Paraíso, São Paulo – SP, CEP
04001-902

100%

Revolut Technologies
Japan, Inc.*

1* Held indirectly

Revolut Securities UAB*

Revolut Technologies
Singapore Pte. Ltd*

Notes to the Consolidated Financial Statements⚫ Revolut Ltd filialas. Registered address: Konstitucijos ave. 21B, Vilnius, LT-08130⚫ Revolut Ltd Zweigniederlassung Deutschland. Registered address: Friedrichstrasse 76, c/o WeWork, 10117 Berlin, Germany⚫ Revolut Ltd Londra Sucursala Bucuresti. Registered address: Bucuresti Sectorul 2, Bulevardul Dimitrie Pompeiu, Nr. 5-7, Corp
B, Birou 229A, Cladirea Hermes Business Campus, Etaj 2⚫ Revolut Ltd succursale de France. Registered address: Patchwork SAS, 3 rue de Stockholm, 75008 Paris⚫ Revolut Ltd (Irish Branch). Registered address: Dublin landings, North dock, Dublin 1, Ireland
Revolut Bank UAB conducts business through branches in France, Ireland, Hungary, Poland, Italy, Portugal, Belgium, Germany,
Spain and the Netherlands. The following branches were in existence as at 31 December 2022:⚫ Revolut France succursale de Revolut Bank UAB (French Branch). Registered address: 3 Rue de Stockholm (Patchwork) SaintLazare, 75008, Paris France⚫ Revolut Bank UAB (Netherlands Branch). Registered address: Barbara Strozzilaan 201, 1083HN Amsterdam, Netherlands⚫ Revolut Bank UAB (Sp z o.o.) Oddział w Polsce (Polish Branch). Registered address: Podium Park, Jana Pawła, 43a, Kraków, 31864, Polska⚫ Revolut Bank UAB - Sucursal em Portugal (Portugal Branch). Registered address: Sitio, Rua do Campo Alegre, 774 Distrito: Porto
Concelho: Porto Freguesia: Lordelo do Ouro e Massarelos 4150 171 Porto⚫ Revolut Bank UAB Magyarországi Fióktelepe (Hungarian Branch). Registered address - 1137 Budapest, Radnóti Miklós utca 2.,
Hungary⚫ Revolut Bank UAB (Irish Branch). Registered address: 2 Dublin landings, North dock, Dublin 1, Ireland⚫ Revolut Bank UAB (Belgian Branch). Registered address: Avenue Louise 65, 1050 Ixelles, Louise Centre, Stephanie Square
Centre⚫ Revolut Bank UAB (Italian Branch). Registered address: Via Arcivescovo Calabiana 6, 20139 Milan, Italy

Revolut Annual Report 2022

128

Revolut Annual Report 2022

129

Notes to the Consolidated Financial Statements

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

RT Digital Securities Cyprus Ltd conducts business through an Italian branch; registered address: Piazza Santa Maria delle Grazie
1, 20122, Milan (MI), Italy.
Additional branches were incorporated as from 1 January 2023:⚫ Revolut Bank UAB Sucursal En España (Spanish Branch). Registered address: C/ Serrano 20 - Cloudworks Madrid, 28001
Madrid, Spain⚫ Revolut Bank UAB Vilnius Sucursala Bucuresti (Romanian Branch). Registered address: Bucureşti Sectorul 1, Bulevardul ION
MIHALACHE, Nr. 15-17, Mindspace Victoriei, biroul 111, cladirea Tower Center International, Etaj 1, Romania

One branch was deregistered as of as of 29 June 2023:

1

2

3

4

5

6

7

8

9

15. Investment in Commodities

11

12

13

14

15

16

31 December 2022

31 December 2021*

£000

£000

Cash collateral

93,1206,550

Amounts due from card schemes

47,16676,098Amounts recoverable on card scheme contracts**

21,714

21,488Settlement receivables

59,53464,741

Trade receivables

24,849

5,409

7,120

3,105

Amounts falling due within one year
Financial assets:

Negative customer balances⚫ Revolut Bank UAB (Sp z o.o.) Oddział w Polsce (Polish Branch). Registered address: Podium Park, al. Jana Pawła II, 43a, Kraków,
31-864, Poland

10

16. Trade and Other Receivables
Group⚫ Revolut Bank UAB, Zweigniederlassung Deutschland (German Branch). Registered address: Gontardstraße 11, 10178 Berlin,
GermanyGroup

Notes to the Consolidated Financial Statements

Other deposits with government institutions

5,658

—

Other receivables

28,007

21,359Total financial assets

287,168

198,750

Prepayments and accrued income

20,141

4,794

Other non-financial assets***

34,2503,336

Non-financial assets:

31 December 2022

31 December 2021

£000

£000

Commodities

94,221

66,356

Total investment in commodities

94,221

66,356The Company does not have any investment in commodities as at 31 December 2022 (2021: £nil).
Investment in commodities represent holdings in precious metals that are held to hedge the Group’s exposure to commodity pricerisk on its customer liabilities related to precious metals. These investments are accounted for at fair value through profit or loss.

Total non-financial assets

54,391

8,130

Total trade and other receivables

341,559

206,880*The presentation of trade and other receivables has been modified, as disclosed in Note 2.3.
** Amounts recoverable on card scheme contracts represents collateral held with our partners for the settlement process.
*** Other non-financial assets primarily represent payroll prefunding and capitalised costs incurred to obtain customer contracts.
The Company recognises amounts owed by group undertakings of £0.2 million as at 31 December 2022 (2021: £nil).
Capitalised costs
During the year, the Group capitalised £27.6 million (2021: £19.1 million) as costs to obtain customer contracts, determined based onreferral campaign rewards paid for new customer sign-ups less rebates received from vendors. Of the total capitalised cost, £9.2
million was released in 2022 (2021: £2.4 million). The capitalised cost is amortised over three years which reflects management's
estimate of the average life of a customer contract based on historical customer retention data. There were £0.8 million impairment
losses recognised on the capitalised costs in 2022 (2021: £nil).
The Group does not recognise any contract assets as at 31 December 2022 (2021: £nil).
Management assesses that the carrying amounts of debtors approximate their fair values.

Revolut Annual Report 2022

130

Revolut Annual Report 2022

131

Notes to the Consolidated Financial Statements

16

17

18

19

20

21

22

23

24

25

26

27

28

29

Notes to the Consolidated Financial Statements

17. Loans and Advances to Customers
Group

31 December 2021

£000

£000

Consumer loans

194,663

14,865Credit card

14,5893,322

Less: loss allowance(5,672)(371)

203,580

17,816

Analysed into:
Non-current assets

134,567

12,946

Current assets

69,013

4,870

203,580

17,816Net loans and advance to customers

17

18

19

20

21

22

23

24

25

26

27

28

29

19. Property, Equipment and Right-of-use Assets
31 December 2022

Net loans and advance to customers

16

The Company does not have any loans and advances to customers as at 31 December 2022 (2021: £nil).

Group

Fixtures &fittings

Officeequipment

Computerequipment

Right-of-use
assets

Total

£000

£000

£000

£000

£000

At 1 January 2021

11,871

1,695

6,558

28,542

48,666

Additions

108

79

1,497

302

1,986

Disposals and derecognition

—

—

—

(6,677)(6,677)

Foreign exchange movements

(136)

(272)

(145)

(246)

(799)

At 31 December 2021

11,843

1,502

7,910

21,921

43,176

At 1 January 2022

11,843

1,502

7,910

21,921

43,176

Additions

78

—

4,303

747

5,128

Disposals and derecognition

—

(69)

—

(1,574)(1,643)

Cost

Foreign exchange movements

195

11

461

132

799

12,116

1,444

12,674

21,226

47,460

At 1 January 2021

(1,702)(440)(2,977)(6,049)(11,168)

Charge for the year

(1,188)(351)(2,196)(5,168)(8,903)

—

—

—

1,733

1,733

At 31 December 2022

18. Inventories

Accumulated depreciation and impairment losses
Group

Inventory — cards, packaging & other
Inventory — card readers
Total inventories

31 December 2022

31 December 2021

£000

£000

17,838

7,396

766

—

18,604

7,396

Inventories comprise cards (including prepaid, credit and debit cards), packaging and card readers not yet distributed to customers.
The difference between purchase price of inventories and their replacement cost is not material. The use of inventory recognised
in fee expense during the year was £22.3 million (2021: £16.3 million).

Disposals and derecognition
Foreign exchange movements

8

80

90

112

290

At 31 December 2021

(2,882)(711)(5,083)(9,372)(18,048)

At 1 January 2022

(2,882)(711)(5,083)(9,372)(18,048)

Charge for the year

(1,196)(369)(2,368)(5,117)(9,050)

Disposals and derecognition

—

—

—

1,574

1,574

Foreign exchange movements

(80)

29

20

35

4

(4,158)(1,051)(7,431)(12,880)(25,520)

At 31 December 2022

7,958

393

5,243

8,346

21,940At 31 December 2021

8,961

791

2,827

12,54925,128

At 1 January 2021

10,169

1,255

3,581

22,49337,498At 31 December 2022

There were £0.2 million of losses recognised in cost of sales during the year in respect of obsolete inventory (2021: £nil).

Carrying value

The Company does not have any inventories as at 31 December 2022 (2021: £nil).

The Company does not have any property, equipment, or right-of-use assets as at 31 December 2022 (2021: £nil).
Right-of-use assets primarily represent leases for office locations.

Revolut Annual Report 2022

132

Revolut Annual Report 2022

133

Notes to the Consolidated Financial Statements

16

17

18

19

20

21

22

23

24

25

26

27

28

29

Notes to the Consolidated Financial Statements

20. Intangible Assets
Group

17

18

19

20

21

22

23

24

25

26

27

28

29

22. Trade and Other Payables
Purchased software

Goodwill

Total

31 December 2022

31 December 2021

£000

£000

£000

£000

£000

Accruals

64,256

71,633601

Contract liabilities

33,24322,449Cost
At 1 January 2021

16

Group

601

—

Additions

7,736

—

7,736

Settlement payables

59,62830,312

At 31 December 2021

8,337

—

8,337

Trade payables

7,263

6,441

Other taxation and social security

10,691

12,002

8,003

22,411

183,084

165,248

At 1 January 2022

8,337

—

8,337

Other creditors

Additions

38

2,003

2,041

Total trade and other payables

Disposals

(510)

—

(510)

At 31 December 2022

7,865

2,003

9,868

The contract liabilities balance recognised at the beginning of each period is fully released into fee revenue during the year, as
these liabilities have a duration of less than one year.

Accumulated amortisation and impairment losses
At 1 January 2021

(190)

—

(190)

Charge for the year

(7,426)—(7,426)

At 31 December 2021

(7,616)—(7,616)

At 1 January 2022

(7,616)—(7,616)Charge for the year

(52)

—

(52)

Disposals

305

—

305

(1)

—

(1)

(7,364)—(7,364)Foreign exchange movements
At 31 December 2022

The Company recognises an obligation to the Employee Benefit Trust of £0.9 million as at 31 December 2022 (2021: £nil).

23. Provisions for Liabilities
Group

£000

At 1 January 2021

1,788

Provided during the year24

At 31 December 2021

1,812

At 1 January 2022

1,812

Carrying amountAt 31 December 2022

501

2,003

2,504

At 31 December 2021

721

—

721

Provided during the year

At 1 January 2021

411

—

411

Other movements
At 31 December 2022

The Company does not have any intangible assets as at 31 December 2022 (2021: £nil).

—
16,314

Provisions recognised by the Group includes the provision for settlement of the VAT liability with HMRC as well as the property
dilapidation provision for leased office locations. The property dilapidation provision is based on management's best estimate forthe leases to which the Group is party. Uncertainty associated with these factors may result in the ultimate liability being different
from the reported provision. Dilapidation provisions are expected to be utilised within one to five years.

21. Customer Liabilities
Group

14,50231 December 2022

31 December 2021

£000

£000

Customer liabilities in respect of deposits

7,144,858

583,845

E-money in issue

5,411,555

6,711,889

Customer liabilities in respect of commodities

94,48465,462

12,650,897

7,361,196(57,709)—

12,593,188

7,361,196

Customer liabilities before changes in fair value
Changes in the fair value of hedged liabilities in portfolio hedges of interest rate risk
Total customer liabilities

The Company does not have any provision for liabilities as at 31 December 2022 (2021: £nil).

The Company does not have any customer liabilities as at 31 December 2022 (2021: £nil).

Revolut Annual Report 2022

134

Revolut Annual Report 2022

135

Notes to the Consolidated Financial Statements

16

17

18

19

20

21

22

23

24

25

26

27

28

29

Notes to the Consolidated Financial Statements

24. Loans and Borrowings
Group

31 December 2022

31 December 2021

£000

£000

Secured——Unsecured

36

122

Total loans and borrowings

36

122

Analysed into:
Non-current liabilities——

Current liabilities

36

122

Total loans and borrowings

36

122

The Company does not have any loans and borrowings as at 31 December 2022 (2021: £nil).

16

17

18

19

20

21

22

23

24

25

26

27

28

29

1 Jan
2021

SharesissuedSharesconverted

Share
options
exercised

31 Dec2021

SharesissuedSharesconverted

Share
options
exercised

31 Dec
2022

000s

000s

000s

000s

000s

000s

000s

000s

000s

ordinaryshares13,828—18,150283

32,261——

81

32,342

ordinaryshares A

18,052—(18,052)

—

—

—

—

—

—

ordinaryshares D

6,085

—

(41)

—

6,044

—

—

—

6,044

ordinaryshares E

4,834

—

(5)

—

4,829

—

—

—

4,829

ordinaryshares F

—

1,312

384

—

1,696

—

—

—

1,696

ordinaryshares G

—

1,783

(12)

—

1,771

—

—

—

1,771

ordinaryshares H—

12,934(426)—

12,508———12,50842,79916,029(2)283

59,109——81

59,190Total

25. Share CapitalGroup and Company

31 December 2022

31 December 2021££

32,342,358 (2021: 32,330,225) ordinary shares

3.23

3.23

6,044,294 (2021: 6,044,294) ordinary shares D

0.60

0.60

4,828,923 (2021: 4,828,923) ordinary shares E

0.48

0.48

1,695,374 (2021: 1,695,374) ordinary shares F

0.17

0.17

1,770,754 (2021: 1,770,754) ordinary shares G

0.18

0.18

12,508,401 (2021: 12,508,401) ordinary shares H

1.25

1.25

Total share capital

5.91

5.91

Allotted, called up and fully paid

All shares have a nominal value of £0.0000001 each. The G Shares and H Shares were issued to fulfil the Group’s growth shares
scheme.
On 31 January 2023, the share capital of the Company was reduced by reducing the nominal value of each share of each class of
the Company's shares from £0.0000001 to £0.00000001.
Rights attaching to the shares – Income
All Eligible Shares (all shares in the capital of the Company except for G Shares and H Shares) shall rank pari passu in respect ofdividends and dividends shall be paid to the Eligible Shareholders pro rata according to the number of Eligible Shares held by each
Eligible Shareholder respectively. The G Shares and H Shares shall not confer any rights to participate in dividends.
Rights attaching to the shares - Capital
On a return of capital, on a liquidation, reduction of capital or otherwise (including following an Asset Sale), the surplus assets of
the Company remaining after payment of its liabilities:
First, (i) £1 in aggregate to the holders of G Shares (as a class), (ii) £1 in aggregate to the holders of H Shares (as a class) and (iii)£1 in aggregate to the holders of Deferred Shares (as a class), in each case on a pro rata basis; andSecondly, pro rata to the holders of Ordinary Shares and Ordinary Series Shares according to the number of Shares held by each
Shareholder respectively (in the case of the Ordinary Series Shares (the Ordinary D, Ordinary E and Ordinary F Shares), as though
they had been fully converted into Ordinary Shares, which shall apply, mutatis mutandis).
In the event of a Sale, the proceeds of such Sale (net of any costs associated with such Sale) ('Net Sale Proceeds') shall, save inrespect of any Shares not sold in connection with that Sale, be distributed between the Shareholders as follows:First, to each Ordinary F Shareholder, in priority to all other Shareholders, an amount equal to the Subscription Price for each
Ordinary F Share held (as if the Ordinary F Shares constituted the same class of Shares) plus any arrears or accruals of dividend(if any) on the Ordinary F Shares (as the case may be) due or declared but unpaid down to the date of the proceeds of such Sale
being returned, provided that if there are insufficient Net Sale Proceeds to pay such amounts to all Ordinary F Shareholders, infull, the available Net Sale Proceeds shall be distributed to the Ordinary F Shareholders in proportion to the Subscription Price of
the Ordinary F Shares held by them and arrears or accruals of dividend due to them respectively;

Revolut Annual Report 2022

136

Revolut Annual Report 2022

137

Notes to the Consolidated Financial Statements

16

17

18

19

20

21

22

23

24

25

26

27

28

29

Notes to the Consolidated Financial Statements

the Subscription Price for each Ordinary D/E Share held (as if the Ordinary D/E Shares constituted the same class of Shares)plus

2. any arrears or accruals of dividend (if any) on the Ordinary D/E Shares (as the case may be) due or declared but unpaid down
to the date of the proceeds of such Sale being returned, provided that
3. if there are insufficient Net Sale Proceeds to pay such amounts to all Ordinary D/E Shareholders, in full, the available Net Sale
Proceeds shall be distributed to the Ordinary D/E Shareholders in proportion to the Subscription Price of the Ordinary D/EShares held by them and arrears or accruals of dividend due to them respectively ((i) and (ii), or (iii), as the case may be, being
the 'Price Protection Proceeds');

Third, to each Ordinary Shareholder including any Ordinary Shares arising from conversion of the Ordinary Series Shares, andVested In-The-Money H Shareholder in proportion to the number of Ordinary Shares and Vested In-The-Money H Shares held by
them, respectively, as if such Ordinary Shares, and Vested In-The-Money H Shares constituted the same class of Shares up tosuch amount of the remaining Net Sale Proceeds as is less than or equal to the First Hurdle Amount;
Fourth, any amount of the Net Sale Proceeds which exceeds the First Hurdle Amount and is less than or equal to the Second
Hurdle Amount (for the avoidance of doubt, if there is no Second Hurdle Amount, this paragraph shall not apply, and insteadparagraph immediately below shall apply) shall be distributed among the Ordinary Shareholders (including any Ordinary Sharesarising from conversion of the Ordinary Series Shares), the Vested G First Hurdle Shareholders and the Vested In-The-Money H
Shareholders in the proportion that the aggregate number of Ordinary Shares, Vested G First Hurdle Shares and Vested In-TheMoney H Shares held by each holder bears to all of the Ordinary Shares, Vested G First Hurdle Shares and Vested In-The-Money
H Shares then in issue;
Then, the following step to be applied for each Nth Hurdle Amount which has been set in respect of the tranche of G Shares, startingwith the Second Hurdle Amount (if any): any amount of the Net Sale Proceeds which exceeds the Nth Hurdle Amount and is lessthan or equal to the N+1th Hurdle Amount shall be distributed among the Ordinary Shareholders (including any Ordinary Sharesarising from conversion of the Ordinary Series Shares), Vested G First Hurdle Shareholders to Vested G Nth Hurdle Shareholders(inclusive), and Vested In-The-Money H Shareholders in the proportion that the aggregate number of Ordinary Shares, Vested G
First Hurdle Shares to Vested G Nth Hurdle Shares, and Vested In-The-Money H Shares held by each holder bears to all of theOrdinary Shares, Vested G First Hurdle Shares to Vested G Nth Hurdle Shares, and Vested In-The-Money H Shares then in issue;
Next, any amount of the Net Sale Proceeds which exceeds the Maximum Hurdle Amount (which, for the avoidance of doubt, shallbe the First Hurdle Amount if no other Hurdle Amounts have been set) shall be distributed among the Ordinary Shareholders(including any Ordinary Shares arising from conversion of the Ordinary Series Shares), Vested G Shareholders and Vested In-TheMoney H Shareholders in the proportion that the aggregate number of Ordinary Shares, Vested G Shares, and Vested In-TheMoney H Shares held by each holder bears to all of the Ordinary Shares, Vested G Shares, and Vested In-The-Money H Sharesthen in issue; and finally, nothing, unless the holders of each Ordinary Share (including any Ordinary Shares arising from conversionof the Ordinary Series Shares), Vested G Share, and Vested In-The-Money H Share receive proceeds of £1,000,000 or more pershare, in which case the holders of the Deferred Shares (as a class) shall be entitled to receive £1 in aggregate, on a pro rata basis.
Rights attaching to the shares - Conversion of Ordinary Series Shares
Immediately on the request in writing, at any time, by an Ordinary Series Shareholder, such number of his Ordinary Series Sharesas such Ordinary Series Shareholder shall specify on the date of such request shall automatically be converted into and redesignated as Ordinary Shares at the rate of one Ordinary Share for every Ordinary Series Share (as adjusted from time to time asprovided herein, the 'Conversion Rate').
Rights attaching to the shares - Conversion of Ordinary D Shares
All of the fully paid Ordinary D Shares then in issue shall automatically be converted into and re-designated as Ordinary Shares at
the Conversion Rate immediately upon the request in writing of the relevant majority or the occurrence of a Listing.
Revolut Annual Report 2022

17

18

19

20

21

22

23

24

25

26

27

28

29

Rights attaching to the shares - Conversion of Ordinary E Shares

Second, to each Ordinary D/E Shareholder, in priority to all other Shareholders other than Ordinary F Shareholders, an amountequal to:
1.

16

138

All of the fully paid Ordinary E Shares then in issue shall automatically be converted into and re-designated as Ordinary Shares at
the Conversion Rate immediately upon the request in writing of the relevant majority or the occurrence of a Listing.
Rights attaching to the shares - Conversion of Ordinary F Shares
All of the fully paid Ordinary F Shares then in issue shall automatically be converted into and re-designated as Ordinary Shares at
the Conversion Rate immediately upon the request in writing of the relevant majority or the occurrence of a Listing.
Rights attaching to the shares - Conversion of G Shares
Unless otherwise determined by the Board at any time prior thereto, all of the fully paid G Shares then in issue shall automaticallybe converted into and re-designated as Ordinary Shares immediately upon the occurrence of a Listing.
Rights attaching to the shares - Conversion of H Shares
Unless otherwise determined by the Board at any time prior thereto, all of the fully paid H Shares then in issue shall automaticallybe converted into and re-designated as Ordinary Shares immediately upon the occurrence of a Listing.
The Board shall, in such circumstances as are stated in any particular Award Letter pursuant to which H Shares have been awarded(and subsequently subscribed for or the beneficial interest therein acquired), have the right to determine that the H Shares (orrelevant number thereof) held by an H Shareholder (and/or his Permitted Transferees, if applicable) shall convert into Deferred
Shares (on the basis of one Deferred Share for each applicable H Share). Upon such conversion into Deferred Shares, whichshall take place on the date of the Board’s determination (the 'H Share Conversion Date'), the Company shall be entitled to enter
the H Shareholder (and/or his Permitted Transferees, if applicable) on the register of members of the Company as the holderof the appropriate number of Deferred Shares as from the H Share Conversion Date. Upon the H Share Conversion Date, theH Shareholder (and/or his Permitted Transferees, if applicable) shall deliver to the Company at its registered office the shares
certificate(s) (to the extent not already in the possession of the Company) or an indemnity for lost certificate in a form acceptable
to the Board for the H Shares so converting, and upon such delivery the Company shall be entitled to either (a) effect a transferfrom the relevant H Shareholder to the Employee Trustee of all such Deferred Shares in consideration for an aggregate sum of one
penny and, upon such transfer becoming effective the relevant Deferred Shares shall be automatically re-designated as H Sharesshall apply mutatis mutandis to such transfer); or (b) issue to such H Shareholders (and/or their Permitted Transferees, if applicable)
share certificate(s) for the number of Deferred Shares resulting from the relevant conversion and any remaining H Shares.
Rights attaching to the shares - Conversion of Deferred Shares
Unless otherwise determined by the Board at any time prior thereto, all of the Deferred Shares then in issue shall automatically beconverted into and re-designated as Ordinary Shares immediately upon the occurrence of a Listing.
Rights attaching to the shares - Votes in general meeting and written resolutions
The Ordinary Series Shares shall confer on each holder of Ordinary Series Shares the right to receive notice of and to attend, speak
and vote at all general meetings of the Company and to receive and vote on proposed written resolutions of the Company.
The Ordinary Shares shall confer on each holder of Ordinary Shares the right to receive notice of and to attend, speak and vote at
all general meetings of the Company and to receive and vote on proposed written resolutions of the Company.
The G Shares and H Shares shall not entitle the holders of them to receive notice of, to attend, to speak or to vote at any general
meeting of the Company nor to receive or vote on, or otherwise constitute an eligible member for the purposes of, proposed
written resolutions of the Company.
The Deferred Shares (if any) shall not entitle the holders of them to receive notice of, to attend, to speak or to vote at any general
meeting of the Company nor to receive or vote on, or otherwise constitute an eligible member for the purposes of, proposed
written resolutions of the Company.
Revolut Annual Report 2022

139

Notes to the Consolidated Financial Statements

16

17

18

19

20

21

22

23

24

25

26

27

28

29

Notes to the Consolidated Financial Statements

16

17

18

19

20

21

22

23

Share history

Foreignexchangereserve

Share-based
payment
reserve

Net investment
in foreign
operation
reserve

£000

£000

£000

£000

£000

£000

(255)

67,551———

67,296Equity-settled sharebased payment charge—

47,352———47,352Foreign currencytranslation adjustment

Group

At 1 January 2021

Financialinvestment
reserve

Own shares heldin Employee
Benefit Trust*

Total

26

27

28

29

Own shares
held in Employee
Benefit Trusts*

Total

£000

£000

£000

At 1 January 2021

—

—

—

Equity-settled share-based payment charge

—

—

—

Purchase of own shares within Employee Benefit Trust

—

—

—

Tax impact of changes to other reserves

—

—

—

At 31 December 2021

—

—

—

At 1 January 2022

—

—

—

Transfer of reserve on reorganisation

137,695(445)

137,250

Equity-settled share-based payment charge

16,300—16,300Purchase of own shares within Employee Benefit Trust

—

(446)

(446)

Tax impact of changes to other reserves

—

—

—

153,995(891)

153,104

Company

26. Other Reserves

25

Share-based
payment reserve

On 5 October 2020, 1 ordinary share of £0.01 was subdivided into 100,000 ordinary shares of £0.0000001 each.
On 28 April 2022, the following shares were allotted: 32,196,878 ordinary shares of £0.0000001 each; 6,044,294 Ordinary D sharesof £0.0000001 each; 4,828,923 Ordinary E shares of £0.0000001 each; 1,695,374 Ordinary F shares of £0.0000001 each; 1,770,754
Ordinary G shares of £0.0000001 each; 12,508,401 Ordinary H shares of £0.0000001 each, in connection with the insertion of theCompany as the ultimate parent company in the Group.

24

At 31 December 2022

(9,237)

—

—

—

—

(9,237)* The Group and Company consolidate one share trust. The share reserve represents the cost of shares in the Revolut Group
Employee Benefit Trust (Fiduchi), which are held for the purposes of fulfilling obligations in respect of the Group’s future
share awards.

Revaluation loss onfinancial investment

—

—

—

(763)

—

(763)

The following describes the nature and purpose of the reserves within equity.

Cumulative hedge
effectiveness reserve
movement

—

—

3,365

—

—

3,365

Foreign exchange reserve

Purchase of own shareswithin Employee Benefit
Trust

The foreign exchange reserves represents the cumulative foreign currency translation movement on the assets andliabilities of the Group’s international operations at year-end exchange rates.

—

—

—

—

(445)

(445)

Share-based payment
reserve

The share-based payment reserve records the cumulative charge to equity in respect of equity-settled
share-based payments.

Tax impact of changes toother reserves

—

—

—

—

—

—

Net investment in foreign
operation reserve

The net investment in foreign operation reserve represents the effective portion of the gains or losses on theretranslation of investments into foreign operations due to exchange rate risks.

At 31 December 2021

(9,492)

114,903

3,365

(763)

(445)

107,568

Financial investment
reserve

The financial investment reserve includes unrealised gains or losses in respect of financial instruments measured
at FVOCI.

At 1 January 2022

(9,492)

114,903

3,365

(763)

(445)

107,568

Equity-settled sharebased payment charge

Own shares held in
Employee Benefit TrustThis reserve represents the value of shares issued by the Company that are held by the Employee Benefit Trust(Fiduchi) which are deducted from equity.

—

39,049———39,049Foreign currencytranslation adjustment

17,442————

17,442

Revaluation loss onfinancial investment

—

—

—

(12,825)—(12,825)

Cumulative hedge
effectiveness reserve
movement——(2,090)——(2,090)Purchase of own shareswithin Employee Benefit
Trust

—

—

—

—

(446)

(446)

Tax impact of changes toother reserves—

43,364

—

3,444

—

46,8087,950

197,316

1,275(10,144)(891)

195,506

At 31 December 2022

Revolut Annual Report 2022

140

27. Share-Based Payments
The Group issues equity-settled share-based payment awards to certain employees. Equity-settled share-based payments aremeasured at fair value (excluding the effect of non-market performance vesting conditions) at the date of grant. The fair value
determined at the grant date of the equity-settled share-based payments is expensed on a graded basis over the vesting period,
based on the Group's estimate of the number of awards that will eventually vest and adjusted for the effect of non-market-based
vesting conditions.
2022 scheme and parent company modification
During 2022, a change in the legal structure of Revolut occurred; the ultimate parent company of the Group has changed to
Revolut Group Holdings Ltd instead of Revolut Ltd. With this change, all previously awarded grants’ underlying entity have been
novated from Revolut Ltd to Revolut Group Holdings Ltd.
Revolut Annual Report 2022

141

Notes to the Consolidated Financial Statements

16

17

18

19

20

21

22

23

24

25

26

27

28

29

Notes to the Consolidated Financial Statements

In 2022, the Group issued share options under the Unapproved Options Plan ('UOP') for both UK and non-UK employees of theGroup and issued no share options under the Company Stock Option Scheme ('CSOP') plan. Furthermore, Restricted Stock Units('RSUs') were issued to employees under US entities.
The fair value of the options granted to employees in the year ended 31 December 2022 has been determined utilizing an options
pricing model, which encompasses the Black-Scholes methodology. It's important to note that the strike price of the options given
to employees in 2022 was almost zero, making their fair value similar to that of ordinary shares.
Options granted have varying vesting schedules depending on the reason for the grant for example Joining Bonus, Referral Bonus,
Promotion Bonus, Performance Bonus. The main vesting schedules are: (i) a four-year vesting schedule with 25% vesting on eachanniversary; (ii) a two-year vesting schedule with 50% upfront and 25% vesting annually over the subsequent two years (iii) a twoyear vesting schedule where 1/24th vests each month. Employees are required to remain in employment with the Group until thevesting period has elapsed; otherwise, the awards lapse. UOP expire after ten years whereas RSUs expire after seven years.
2021 scheme and modification
In 2021, the Group introduced growth shares scheme to replace the CSOP and UOP prospectively. Employees having stock options
under CSOP and UOP were eligible to voluntarily exchange their existing holdings in growth shares.
Unlike options, growth shares entitle the shareholder to a capital return once the value of the Company exceeds a pre-set value
per share (the 'Hurdle Price') set by independent valuers. Shares granted will be held in the company-held trust until exercised.

18

19

20

21

22

23

24

25

26

27

28

29

Key assumptions used in determining the values of options are shared below.

2022

2021

Option Pricing Model

Option Pricing Model

30 - 40%

0 - 45%

Expected term (years)

1 - 1.5 years

0 - 4 years

Risk-free rate

1.9% - 4.3%

(0.6)% - 0.6%

—

—

Model
Expected volatility

Expected dividend yields

Expected volatility is derived from observed volatility from comparable companies. Calculating the fair value of options in privatecompanies requires making highly subjective assumptions including the methodology used. These assumptions can materiallyaffect the fair value of share based payments.
Reconciliation of outstanding share-based payment awards
A reconciliation of share option movements over the years ended 31 December 2022 and 2021 is shown below.

Weighted average
exercise price2022

Number2022

Weighted average
exercise price2021*

Number2021*

0.75

1,493,693

0.45

2,478,457

Granted during the year—

210,873

0.48

906,735

Exercised during the year

2.47

(79,716)0.41(717,852)

Sold/forfeited during the year

1.46

(134,605)

0.02(1,173,647)

Outstanding at the end of the year

0.49

1,490,245

0.75

1,493,693

Exercisable at the end of the year

0.53

1,203,191

0.66

1,000,503

CSOP and unapproved share option schemes
Outstanding at the beginning of the year

In 2020, the Group issued share options under the UOP for both UK and non-UK employees of the Group and issued no shareoptions under the CSOP.

17

Valuation Assumptions

Growth shares granted as a performance bonus vest according to a schedule with 50% vesting on the grant date and 25% vesting
annually on the anniversary of the grant date for the next two years. Growth shares granted as a sign-on bonus or promotion willvest on an annual basis over four years (i.e. 25% at each year-end).

In 2019, the Group operated two share options schemes. The first is an HMRC-approved Company Share Option Scheme ('CSOP')
plan, for UK employees, and the second is an Unapproved Options Plan ('UOP'), for the non-UK employees.

16

The options are granted with a fixed exercise price, are exercisable after they have vested, and expire after ten years.
*The weighted average exercise price and number of shares have been restated to correctly reflect the net impact of award classconversions and the contractual timing impact of temporary and permanent changes to employment status on forfeited options.

Salary Sacrifice
In addition to awards described above, a number of employees were granted share options in exchange for a temporary reduction
in salary for a twelve-month period under the UOP. These options vest monthly over a twelve-month vesting period, during whichtime the employees must remain in employment with the Group. The options have a fixed exercise price and a maximum term of
ten years after which they expire.

Fair values have been calculated by independent accounting advisors at the date of grant of each share award. The estimatedweighted average fair value at the date of exercise for share options exercised in 2022 was £161.99 (2021: £157.23).

In accordance with IFRS 2, equity-settled awards should be valued by measuring the fair value of services received directly where
possible. In this case it was possible to measure the fair value of the employee services directly by reference to the value of thesalary foregone.
Shares awarded to non-executive directors
Until May 2021, the non-executive directors of the Company agreed to forego a proportion of their cash salaries in exchange forpayment in shares. In May 2021, all of the Company’s non-executive directors' salaries returned to being paid in cash. As at 31
December 2021, the non-executive directors held shares previously granted under the salary sacrifice agreement. During 2022,
non-executive directors were not granted shares.

Revolut Annual Report 2022

142

Revolut Annual Report 2022

143

Notes to the Consolidated Financial Statements

16

17

18

19

20

21

22

23

24

25

26

27

28

29

Notes to the Consolidated Financial Statements

A reconciliation of growth share movements over the years ended 31 December 2022 and 2021 is shown below.

Number2021*

12,767,670

51,223Granted during the year—

12,773,469

Exercised during the year——

(95,572)(57,022)

12,672,098

12,767,670

Sold/forfeited during the year
Outstanding at the end of the year

17

18

19

20

21

22

23

24

25

26

27

28

29

28. Financial Instruments

Number2022
Outstanding at the beginning of the year

16

28.1. Financial instrument by category
The following table shows the carrying amount of each of the categories of financial instruments as at the end of the reporting
period.

Group

31 December 2022

31 December 2021

£000

£000

1,712,292

1,236,481

7,681

9,294

1,719,973

1,245,775

Cash and cash equivalents

10,581,018

7,052,609

Bonds with government and financial institutions – held to collect982,367—

Financial assets measured at fair value*Growth share movements have been restated to correctly reflect the growth share grants and forfeitures that took place during
the year ended 31 December 2021.

Government bonds – held to collect and sell
Derivative financial assets
Total financial assets measured at fair value

The outstanding options end of 2022 weighted average remaining contractual life by exercise price is shown below.

Pool

Financial assets measured at amortised cost

Exercise price

Weighted average remaining contractual life

£

years

Trade and other receivables

287,168

198,750

1

0.00

8.03

Loans and advances to customers

203,580

17,816

2

0.03

5.23

Total financial assets measured at amortised cost

12,054,133

7,269,175

3

0.10

5.87

Financial liabilities measured at fair value

4

0.50

6.51

Customer liabilities in respect of commodities(94,484)(65,462)

5

0.75

6.89

Derivative financial liabilities(90,017)(2,454)

6

13.93

6.75

Total financial liabilities measured at fair value(184,501)(67,916)

7

22.34

7.66

8

29.00

4.12

(12,498,704)(7,295,734)

9

32.00

5.27

(139,150)(130,797)

10

32.37

8.86

(9,641)(14,246)

(36)

(122)

(12,647,531)(7,440,899)

Financial liabilities measured at amortised cost
Customer liabilities
Trade and other payables
Lease liability
Loans and borrowings
Total financial liabilities measured at amortised cost

Impact on Consolidated Statement of Comprehensive Income
The total share-based payment expense recognised in administrative expenses in the Consolidated Statement of Comprehensive
Income is as follows.

*These comparative figures have been restated to include all financial assets and liabilities in the correct measurement categories(trade and other receivables, customer liabilities in respect of commodities, trade and other payables, and loans and borrowings).
The Company does not have any financial instruments as at 31 December 2022 (2021: £nil).

Group

Equity-settled share-based payment charge

2022

2021

£000

£000

39,04947,352Customer liabilities measured at fair value through profit or loss consist of Group-only customer liabilities in respect of contracts
relating to the commodities offering.
Customer liabilities at amortised cost consists of Group-only customer liabilities in respect of customer deposits (EEA) ande-money.

Revolut Annual Report 2022

144

Revolut Annual Report 2022

145

Notes to the Consolidated Financial Statements

16

17

18

19

20

21

22

23

24

25

26

27

28

29

Notes to the Consolidated Financial Statements

16

17

18

19

20

21

22

23

24

25

28.2. Financial instruments measured at fair value

Valuation techniques

The following table analyses financial instruments measured at fair value at the reporting date, by the level in the fair value hierarchy
into which the fair value measurement is categorised. The amounts are based on the values recognised in the Consolidated
Statement of Financial Position.

Derivative financial instruments are valued using valuation techniques that utilise observable inputs.

26

27

28

29

Foreign exchange contracts
Foreign exchange contracts include foreign exchange forward and swap contracts. These instruments are valued by either
observable foreign exchange rates and observable or calculated forward points. With the exception of contracts where a directly
observable rate is available which are disclosed as Level 1, the Bank classifies foreign exchange contracts as Level 2 financial
instruments.

Group

Total

Level 1

Level 2

Level 3

At 31 December 2022

£000

£000

£000

£000

1,712,292

1,712,292

—

—

7,681

—

7,681

—

1,719,973

1,712,292

7,681

—

Interest rate derivatives include interest rate swaps. The valuation techniques include forward pricing and swap models, usingpresent value calculations by estimating future cash flows and discounting them with the appropriate yield curves incorporating
funding costs relevant for the position. These contracts are generally Level 2.

Customer liabilities in respect of commodities(94,484)(94,484)——

Derivative financial liabilities(90,017)—(90,017)—

All derivative financial instruments between Group entities represent foreign currency swap contracts valued using direct andindirect observable inputs.

Total financial liabilities measured at fair value(184,501)(94,484)(90,017)—

Total financial instruments measured at fair value

1,535,472

1,617,808(82,336)—

Financial assets measured at fair value
Government bonds – held to collect and sell
Derivative financial assets
Total financial assets measured at fair value

Financial liabilities measured at fair value

Interest rate derivatives

There were no changes to the valuation techniques during the period.
Financial instruments not measured at fair value

At 31 December 2021*
Financial assets measured at fair value
Government bonds – held to collect and sell

1,236,481

1,236,481

—

—

9,294

—

9,294

—

1,245,775

1,236,481

9,294

—

Customer liabilities in respect of commodities(65,462)(65,462)——

Derivative financial liabilities(2,454)—(2,454)—

Total financial liabilities measured at fair value(67,916)(65,462)(2,454)—

Total financial instruments measured at fair value

1,177,859

1,171,019

6,840

—

Derivative financial assets
Total financial assets measured at fair value

The carrying values of financial instruments not measured at fair value are a reasonable approximation of their fair value. The
following table sets out the fair values of financial instruments not measured at fair value and analyses them by the level in the fairvalue hierarchy into which each fair value measurement is categorised.

Financial liabilities measured at fair value*These comparative figures have been restated to include the Group's customer liabilities in respect of commodities within
financial liabilities measured at fair value.
The Company does not have any financial instruments measured at fair value as at 31 December 2022 (2021: £nil).
Government bonds — held to collect and sell — represent holdings in investment in High Quality Liquid Assets ('HQLA'). These
investments are accounted for at fair value through other comprehensive income ('FVOCI'). Restricted bonds held in respect ofcustomers represent safeguarded funds related to the Group’s regulated e-money services.
For assets and liabilities that are recognised in the consolidated financial statements at fair value on a recurring basis, the Group
determines whether transfers have occurred between levels in the fair value hierarchy by re-assessing categorisation (based on
the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. There wereno transfers between the different levels during the current or prior reporting period.

Revolut Annual Report 2022

146

Revolut Annual Report 2022

147

Notes to the Consolidated Financial Statements

16

17

18

19

20

21

22

23

24

25

26

27

28

29

Notes to the Consolidated Financial Statements

Group

Total

Level 1

Level 2

Level 3

At 31 December 2022

£000

£000

£000

£000

10,581,018—

10,581,018—

Bonds with government and financial institutions – held to collect982,367

982,367——

Trade and other receivables

287,168—

287,168—

Loans and advances to customers

203,580——

203,580

12,054,133

982,367

10,868,186

203,580

Financial assets measured at amortised cost
Cash and cash equivalents

Total financial assets measured at amortised cost

Trade and other payables
Lease liability
Loans and borrowings
Total financial liabilities measured at amortised cost

17

18

19

20

21

(12,498,704)—(12,498,704)—(139,150)—(139,150)—(9,641)——(9,641)

(36)

—

—

(36)

(12,647,531)—(12,637,854)(9,677)

22

23

24

7,052,609—

7,052,609—

Trade and other receivables

198,750—

198,750—

17,816——

17,816

7,269,175—

7,251,359

17,816Loans and advances to customers
Total financial assets measured at amortised cost

Financial liabilities measured at amortised cost
Customer liabilities—(7,295,734)—

Trade and other payables(130,797)—(130,797)—

Lease liability(14,246)——(14,246)

(122)

—

—

(122)

(7,440,899)—(7,426,531)(14,368)

Loans and borrowings
Total financial liabilities measured at amortised cost

*These comparative figures have been restated to exclude certain receivables and the Group's customer liabilities in respect ofcommodities from financial instruments measured at amortised cost. The figures have also been restated to include accrued
liabilities and loans and borrowings within financial instruments measured at amortised cost.

29

£000

Switzerland

17,668—Germany

26,275—

Spain

70,265—Finland25,073—

France99,750—

United Kingdom

88,883—Sweden20,154—

United States

83,644—

Total bonds with financial institutions

431,712—

Bonds with financial institutions—
87,876—616—

Germany

139,661—

Luxembourg

62,261—

Netherlands

499

—

Spain

91,923—Sweden3,314—

164,586—

Total bonds and deposits with government institutions

550,736—

Total gross carrying amount of treasury investments measured at amortised cost

982,448

—

(81)

—

982,367—

United States(7,295,734)

28

31 December 2021

FranceCash and cash equivalents

27

£000

Belgium

Financial assets measured at amortised cost26

31 December 2022

Bonds and deposits with government institutions
At 31 December 2021*

25

28.3. Treasury investments measured at amortised costGroup

Financial liabilities measured at amortised cost
Customer liabilities

16

Loss allowance
Total treasury investments measured at amortised cost

Impairment allowance for treasury investments measured at amortised cost
A reconciliation of changes in the carrying amount and corresponding allowance for expected credit losses by stage for debt
instruments measured at amortised cost is shown below:

The Company does not have any financial instruments not measured at fair value as at 31 December 2022 (2021: £nil).
Stage 1
At 1 January 2022
Increases due to origination and acquisition
Decreases due to bond maturity
At 31 December 2022

Revolut Annual Report 2022

148

Revolut Annual Report 2022

Gross carrying
amountLossallowance

£000

£000

982,448

(81)

—

—

982,448(81)

149

Notes to the Consolidated Financial Statements

16

17

18

19

20

21

22

23

24

25

26

27

28

29

Notes to the Consolidated Financial Statements

Gross carrying
amountLossallowance

£000

£000

Increases due to origination and acquisition——

Decreases due to bond maturity——

At 31 December 2021——

Stage 1
At 1 January 2021

The table below shows the fair value of the debt instruments measured at amortised cost by credit risk, based on the Revolut
Banks’ internal credit rating system, twelve-month Basel PD range and year-end stage classification. The amounts presented aregross of allowance for expected credit losses.

16

17

18

19

20

21

22

23

Gross carrying
amountLossallowance

£000

£000

£000

Internal rating grade
PerformingHigh grade

0.00% - 0.50%

Total
Coverage ratio

982,448(81)

982,448

(81)

26

27

28

29

During 2022, a new macro fair value hedging strategy was adopted that uses interest rate swaps to hedge non-interest-bearing
core deposits.
In the Group’s core deposits macro fair value hedge, macro hedge accounting is used to recognise fair value changes related tochanges in interest rate risk in non-interest-bearing core deposit accounts and therefore reduce the profit or loss volatility thatwould otherwise arise from changes in the fair value of the interest rate swaps alone.
The table below sets out the accumulated fair value adjustments arising from the corresponding continuing hedge relationships.

31 December 2022
12-month Basel
PD range25

28.5. Hedge accounting

At 31 December 2022

Stage 1

24

Customer liabilities inrespect of deposits

At 31 December 2021

Carrying amount ofhedged items

Accumulated
amount of fair value
adjustments on thehedged items

Carrying amount ofhedged items

Accumulated
amount of fair value
adjustments on thehedged items

£000

£000

£000

£000

(2,321,605)

57,709——Line item in theConsolidated
Statement of
Financial Position

Customer liabilities

The following table provides information about the hedging instruments included in the derivative financial assets and liabilities
line items of the Group's Consolidated Statement of Financial Position:

0.01%

The Company does not have any financial instruments measured at amortised cost as at 31 December 2022 (2021: £nil).
At 31 December 2022

At 31 December 2021

28.4. Derivative financial instruments

Group

At 31 December 2022
Carrying
amountassetsCarrying
amountliabilities£000

At 31 December 2021

Notional
amountCarrying
amountassetsCarrying
amountliabilities

Notional
amount

£000

£000

£000

£000

£000

5,357

50,5982,443,608

—

—

—

—

—

—

2,171

—

172,257

5,357

50,5982,443,608

2,171

—

172,257—383

909,729

—

—

—

2,284

39,0263,600,053

6,394

2,143

783,771

40

10

1,789

729

311

107,130

Total derivatives not in hedge accounting
relationships

2,324

39,4194,511,571

7,123

2,454

890,901

Total derivative financial instruments

7,681

90,017

6,955,179

9,294

2,454

1,063,158

Interest rate swap –hedge of core
deposits

Notional amount

Carrying amount

Notional amount

Carrying amount

£000

£000

£000

£000

2,443,608(50,598)——

Line item in theConsolidated
Statement of
Financial Position

Derivatives assets/
derivative liabilities

Derivatives in hedge accounting relationships
Interest rate swaps
Foreign currency swaps
Total derivatives in hedge accounting
relationships

The below table sets out the outcome of the Group's hedging strategy to changes in the fair value of the hedged items andhedging instruments, used as the basis for recognising ineffectiveness.

31 December 2022

Derivatives not in hedge accounting relationships
Interest rate swaps
Foreign currency swaps
Foreign exchange forward contracts

Gains/(losses) attributable to the hedged risk

Macro fair value hedge

Hedged items
Customer liabilities inrespect of deposits

The Company does not have any derivative financial instruments as at 31 December 2022 (2021: £nil).

Revolut Annual Report 2022

150

Revolut Annual Report 2022

Hedging Instruments

Interest rate swaps

Hedged items

Hedging instruments

Net fair value
gain/(loss)

£000

£000

£000

57,709(50,598)

7,111

Line item in theConsolidated
Statement ofComprehensive
IncomeNet gain on changes
in the fair value on
hedging derivatives
and hedged items

151

Notes to the Consolidated Financial Statements

16

17

18

19

20

21

22

23

24

25

26

27

28

29

Notes to the Consolidated Financial Statements

31 December 2021
Line item in theConsolidated
Statement ofComprehensive
IncomeGains/(losses) attributable to the hedged risk
Net fair value
gain/(loss)
Macro fair value hedge
Hedged items
Customer liabilities inrespect of deposits

Hedged items

Hedging instruments

£000

£000

Hedging Instruments

Interest rate swaps

—

£000

—

—

Net gain on changes
in the fair value on
hedging derivatives
and hedged items

16

17

18

19

20

21

22

23

The maturity profile of the Group's hedging instruments used in macro fair value hedge relationships is as follows.

Interest rate swaps in hedge
accounting relationships
Notional Amount
Average strike rate

Less than one
month

One to threemonthsThree to twelve
months

One to five
years

Over five years

Total

£000

£000

£000

£000

£000

£000

—

—

1,372,405

1,071,203—

2,443,608

2.32%

Less than one
month

One to threemonthsThree to twelve
months

One to five
years

Over five years

Total

£000

£000

£000

£000

£000

£000

Notional Amount

—

—

—

—

—

—

Average strike rate

—%

28

29

Group

31 December 2022

31 December 2021

£000

£000

Cash and cash equivalents

10,581,018

7,052,609

Government bonds – held to collect and sell

1,712,292

1,236,481

Bonds with government and financial institutions – held to collect982,367—

Loans and advances to customers

203,580

17,816

7,681

9,294

Other assets

287,168

214,276

Undrawn commitment

31,5007,963

13,805,606

8,538,439

Total credit risk exposure

The Company has £0.2 million of trade and other receivables as at 31 December 2022 (2021: £nil). Undrawn commitment relates
to credit card and buy now pay later unused limits. The loss allowances for this item are included in the tables for the respective
products in the next section.

The following tables set out information about the credit quality of financial investments (financial investments at FVOCI andfinancial assets at amortised cost combined), and loans and advances to customers (split by retail consumer credit product)
without taking into account collateral or other credit enhancement. The amounts of the financial assets in the tables are expressedin thousands of British pounds. There was no exposure for the buy now pay later product at the end of 2021.
An explanation of the terms ‘Stage 1’, ‘Stage 2’ and ‘Stage 3’ is included in Note 4.13.

31 December 2022

29. Financial Risk Management

Group

12 months PD

Treasury investments

The Group is exposed to financial risks in the ordinary course of business. The Group divides these risks into the following
categories: credit risk, liquidity risk and funding management, market risk and capital risk management.

29.1. Credit risk
Credit risk is the risk of financial loss should the Group's borrowers or counterparties fail to fulfil their contractual obligations in fulland on time. The Group is exposed to various credit risks in the course of its operations. The credit risk portfolio is mainly driven byplacements of corporate and client safeguarded funds with financial institutions, and to a lesser extent from a diversified portfolioof highly rated fixed income instruments and retail lending. Revolut's operational exposures are predominantly with investment
grade rated institutions. The Group also has short-dated credit exposure for receivables due from card schemes and merchantacquirers used to process user card top-ups, as well as credit exposures to Crypto counterparties used to facilitate trading.
The Group has retail credit risk relating to its consumer credit products. As at 31 December 2022, these products comprised ofloans, credit cards and buy now pay later across Lithuania, Poland, Ireland, Romania, and the USA.
Revolut Annual Report 2022

27

Credit quality analysis

31 December 2021

Interest rate swaps in hedge
accounting relationships

26

The Group’s exposure to financial institutions is expected to evolve over time alongside the Group’s expansion, with expectations
that a high-quality liquid assets portfolio will be established to support meeting regulatory large exposure thresholds alongsidepotential licence approvals. The Group also expects substantial growth within the retail credit portfolio over the coming year.

Derivative financial assets

31 December 2022

25

To manage credit risk appetite, the Group’s credit risk management policies and procedures require all counterparties giving rise tocredit risk to be assessed at least annually and assigned a credit risk limit commensurate with their risk profile, subject to approved
materiality thresholds. The Group’s Credit Risk function monitors adherence to limits and appropriate management of credit risks
where deterioration is identified. Key decisions are subject to review and approval by the Assets and Liabilities Committee ('ALCO').

Net carrying amountThe net gain on changes in the fair value on hedging derivatives and hedged items. as disclosed in Note 8, of £7.4 million also
includes the clean fair value movement on interest rate swaps not designated in hedge accounting of £0.3 million.

24

152

Stage 1

Stage 2

Stage 3

Total

£000

£000

£000

£000

Grades 1-4

0% - 0.5%

2,694,740——

2,694,740

Grades 5-6

0.5% - 1.3%

—

—

—

—

Grade 7-8

1.3% - 3%

—

—

—

—

Grade 93% - 5%

—

—

—

—

Grade 10

5% - 8%

—

—

—

—

Grade 11+8% - 100%

—

—

—

—

2,694,740——

2,694,740

(81)

—

—

(81)

Carrying amount

2,694,659——

2,694,659

ECL coverage %0.003%——

0.003%

Gross carrying amount
Loss allowance

Revolut Annual Report 2022

153

Notes to the Consolidated Financial Statements

Group

16

12 months PD

Loans

17

18

19

20

21

22

23

24

25

26

27

28

29

Notes to the Consolidated Financial Statements

Stage 1

Stage 2

Stage 3Total

31 December 2021

£000

£000

£000

£000

Group

21

22

23

24

25

26

27

28

29

£000

£000

£000

£000

0% - 0.5%

1,236,748——

1,236,748

Grades 5-6

0.5% - 1.3%

—

—

—

—

Grade 7-8

1.3% - 3%

—

—

—

—

13,700

Grade 93% - 5%

—

—

—

—

10,229Grade 10

5% - 8%

—

—

—

—

2,268

194,806

Grade 11+8% - 100%

—

—

—

—

(1,174)(1,655)(4,746)Gross carrying amount

1,236,748——

1,236,748

174,563

14,884613

190,060

Loss allowance

(267)

—

—

(267)

1.09%

7.31%

72.97%

2.44%

Carrying amount

1,236,481——

1,236,481

ECL coverage %

0.02%

—

—

0.02%

Stage 1

Stage 2

Stage 3

Total

£000

£000

£000

£000

155

60,428Treasury investments

Grades 5-6

0.5% - 1.3%

22,861893

158

23,912

Grades 1-4

Grade 7-8

1.3% - 3%

72,212

5,593

662

78,467

Grade 93% - 5%

5,373

2,579

118

8,070

Grade 10

5% - 8%

10,1103,100490

Grade 11+8% - 100%

5,891

3,653

685

176,480

16,058Loss allowance(1,917)

Carrying amount
ECL coverage %Credit cards

20

Total

240

12 months PD

19Stage 360,033

Group

18

Stage 20% - 0.5%

Stage 1

Stage 2

Stage 3

Total

£000

£000

£000

£000

Group

12 months PD

17

Stage 1

Grades 1-4

Gross carrying amount16

12 months PD

Grades 1-4

0% - 0.5%

2,837

12

24

2,873

Loans

Grades 5-6

0.5% - 1.3%

2,578

104

18

2,700

Grades 1-4

0% - 0.5%

5,356

33

10

5,399

Grade 7-8

1.3% - 3%

2,703

244

51

2,998

Grades 5-6

0.5% - 1.3%

3,941

61

4

4,006

Grade 93% - 5%

1,463

418

80

1,961

Grade 7-8

1.3% - 3%

2,741

198

16

2,955

Grade 10

5% - 8%

968

357

37

1,362

Grade 93% - 5%

1,232

137

5

1,374

Grade 11+8% - 100%

1,585

718

249

2,552

Grade 10

5% - 8%

384

49

1

434

12,134

1,853

459

14,446

Grade 11+8% - 100%

493

186

17

696

Gross carrying amount
Loss allowance

(366)

(266)

(294)

(926)

Gross carrying amount

14,147664

53

14,864

Carrying amount

11,768

1,587

165

13,520Loss allowance

(131)

(43)

(34)

(208)

ECL coverage %3.02%

14.36%

64.05%

6.41%

Carrying amount

14,016621

19

14,656

ECL coverage %

0.93%

6.48%

64.15%

1.40%

Stage 1

Stage 2

Stage 3

Total

£000

£000

£000

£000

Group

Weighted average loss
rate

Negative customer
balances
0-30 days past due

40%

Gross carrying amount

Loss allowance

Net carrying amount
Group

£000

£000

£000

6,520

(2,608)3,912

30-60 days past due

60%

1,394

(836)

558

60-90 days past due

75%

1,177

(883)

294

90-365 days past due

81%

12,298(9,942)2,356> 365 days past due

100%

9,026

(9,026)—Gross carrying amount

30,415

Loss allowance(23,295)

Carrying amount

7,120

ECL coverage %76.59%

Revolut Annual Report 2022

154

12 months PD

Credit cards
Grades 1-4

0% - 0.5%

689

3

2

694

Grades 5-6

0.5% - 1.3%

875

16

3

894

Grade 7-8

1.3% - 3%

812

14

11

837

Grade 93% - 5%

452

44

7

503

Grade 10

5% - 8%

120

44

—

164

Grade 11+8% - 100%

68

149

15

232

Gross carrying amount

3,016

270

38

3,324

Loss allowance

(79)

(63)

(22)

(164)

Carrying amount

2,937

207

16

3,160

ECL coverage %2.62%

23.33%

57.89%

4.93%

Revolut Annual Report 2022

155

Notes to the Consolidated Financial Statements

16

Weighted average loss
rate

Group

17

18

19

20

21

22

23

24

25

26

27

28

29

Notes to the Consolidated Financial Statements

Loss allowance

Net carrying amount

£000

£000

£000

0-30 days past due

—%

1,602

—

1,602

30-60 days past due

25%

1,315

(329)

987

60-90 days past due

50%

1,032

(516)

516

90-365 days past due

100%

8,176

(8,176)—> 365 days past due

100%

11,138(11,138)—

Gross carrying amount23,263

Loss allowance(20,159)

Carrying amount

3,105

ECL coverage %86.66%

Credit risk concentration
An analysis of the Group’s credit risk concentrations for financial investments and loans and advances to customers is provided in
the following table. The amounts in the table represent net carrying amounts.

Group

Loans andadvances tocustomers

At 31 December 2022

At 31 December 2021

Wholesale

Customers(Retail and Business)

Wholesale

Customers(Retail and Business)

£000

£000

£000

£000

Europe (excluding UK)

613,903—852,811—UK

1,111,954—

383,670—

Other

968,802——

Europe (excluding UK)—

200,814—

17,816

UK

—

—

—

—

Other

—

2,766

—

—

2,694,659

203,580

1,236,481

17,816

Total

Revolut Annual Report 2022

17

18

19

20

21

22

23

24

25

26

27

28

29

Loss allowance
Gross carrying amount

Negative customer
balances

Treasury
investments

16

156

The following tables illustrate the migration of expected credit loss ('ECL') allowances across Stages 1, 2, and 3 for credit products,
net of various adjustments, reconciling all changes of loss allowances from the initial balance to the closing balance of the year.

Loans

Stage 1

Stage 2

Stage 3

Total

£000

£000

£000

£000

At 1 January 2021

4

—

—

4

Transfer to Stage 1

—

—

—

—

Transfer to Stage 2

(1)

1

—

—

Transfer to Stage 3

—

—

—

—

Net remeasurement of loss allowance

(1)

1

11

11

New financial assets originated or purchased

134

43

24

201

Financial assets that have been derecognised

(1)

—

—

(1)

Write-offs

—

—

—

—

Other movements

(5)

(2)

(1)

(8)

At 31 December 2021

130

43

34

207

At 1 January 2022

130

43

34

207

Transfer to Stage 1

17

(16)

(1)

—

Transfer to Stage 2

(14)

14

—

—

Transfer to Stage 3

(12)

(7)

19

—

Net remeasurement of loss allowance

(48)

44

316

312

New financial assets originated or purchased

1,862

1,100

1,289

4,251

Financial assets that have been derecognised

(19)

(4)

—

(23)

Write-offs

—

—

(2)

(2)

Other movements

1

—

—

1

1,917

1,174

1,655

4,746

At 31 December 2022

Revolut Annual Report 2022

157

Notes to the Consolidated Financial Statements

Credit cards

16

17

18

19

20

21

22

23

24

25

26

27

28

29

Notes to the Consolidated Financial Statements

Stage 1

Stage 2

Stage 3

Total

£000

£000

£000

£000

At 1 January 2021

5

—

—

5

Transfer to Stage 1

—

—

—

—

Transfer to Stage 2

(1)

1

—

—

Transfer to Stage 3

—

—

—

—

Net remeasurement of loss allowance

(3)

7

10

14

New financial assets originated or purchased

79

59

14

152

Financial assets that have been derecognised

(1)

—

—

(1)

Write-offs

—

—

—

—

Other movements

—

(3)

(1)

(4)

At 31 December 2021

79

64

23

166

At 1 January 2022

79

64

23

166

Transfer to Stage 1

14

(14)

—

—

Transfer to Stage 2

(9)

10

(1)

—

Transfer to Stage 3

(2)

(9)

11

—

Net remeasurement of loss allowance

(16)

94

95

173

New financial assets originated or purchased

295

116

164

575

Financial assets that have been derecognised

(7)

(4)

—

(11)

Write-offs

—

—

—

—

Other movements

12

9

2

23

366

266

294

926

At 31 December 2022

The loss allowances for existing assets remained stable while the overall year-on-year increase of loss allowances was
predominantly driven by the recognition of provisions for new financial assets originated or purchased during the financial year,
due to the organic growth of the portfolio.
Debtors are stated after provision for impairment. The following tables show movement in the ECL provision for trade receivables
and negative customer balances. The provision for impairment recorded for other debtor balances is £nil (2021: £nil).

16

17

18

19

20

21

22

23

24

25

26

27

28

29

29.2. Liquidity risk and funding management
Liquidity risk is the risk that the Group cannot meet its financial obligations when they fall due or is only able to do so at excessive
cost. Funding risk is the risk that Revolut does not have sufficient stable sources of funding to meet its financial obligations
when they fall due or can do so only at excessive cost. Risk arises when assets maturing during a particular period are lower
than corresponding liabilities maturing during the same period. An unexpected increase in assets or a decrease in liabilities canalso create liquidity risk. The Group is, or may in the future be, exposed to a number of liquidity and funding risks, including
retail funding run-off, wholesale funding reduction, pre-funding, marketable and non-marketable assets, contingent off-balance
sheet exposures and commitment drawdowns, intraday requirements, collateral requirements, funding concentration, and foreignexchange. These risks are managed by the Treasury function, with control and oversight provided by the Risk Management
function, the Assets and Liabilities Management Committee and the Management Board. The Group's key liquidity policy is tomaintain a portfolio of unencumbered, high-quality cash instruments and securities that are readily convertible to cash to ensurethat it can meet all of its financial obligations in business-as-usual circumstances and in stress conditions. The Group complies
with this policy by holding surplus cash in the form of overnight deposits with banks and a portfolio of high quality liquid assets.
Maturity analysis for financial assets and financial liabilities
The table below summarises the maturity profile of the Group’s financial assets and liabilities. Whilst customer liabilities arepresented as on demand, the observed behavioural characteristics are more closely aligned to the durations of the asset portfolio.

31 December 2022
Carrying
amountTotal

On demand

Up to threemonthsThree totwelvemonths

One to five
years

Over five
years

£000

£000

£000

£000

£000

£000

£000

Cash and cash equivalents

10,581,018

10,581,018

10,438,866

142,152———

Government bonds – held tocollect and sell

1,712,292

1,712,292—

200,305

1,113,395—

398,592

Bonds with government andfinancial institutions – held tocollect

982,367

982,367

—

—

8,400

973,967—

Trade and other receivables

287,168

287,168

20,358259,183

5,943

1,684

—

Loans and advances tocustomers

203,580

203,580—

30,382

38,631

118,666

15,901

7,681

7,681

—

2,312

5,369

—

—

13,774,106

13,774,106

10,459,224

634,334

1,171,738

1,094,317

414,493

12,593,188

12,593,188

12,593,188

—

—

—

—

Group

Financial assets

Derivative financial assets

Trade Receivables

Negative Customer Balances

£000

£000

Total financial assets

At 1 January 2021—

13,270Financial liabilities

Charged—

9,296

Customer liabilities

Written-off—(2,407)

Trade and other payables

139,150

139,150—

131,853

7,297

—

—

At 31 December 2021—

20,159Derivative financial liabilities

90,017

92,710—39,031

22,96130,718—Charged210

38,316

Lease liability

9,641

9,943

—

1,335

3,894

4,714

—

Written-off—(35,180)

Loans and borrowings

36

36

—

36

—

—

—

23,295

Total financial liabilities

12,832,032

12,835,027

12,593,188

172,255

34,15235,432—Net liquidity gap(2,133,964)

462,079

1,137,586

1,058,885

414,493

Cumulative liquidity gap(2,133,964)(1,671,885)(534,299)

524,586

939,079

At 31 December 2022

210

The loss allowances for existing assets remained stable while the overall year-on-year increase of loss allowances was
predominantly driven by the recognition of provisions for new financial assets originated or purchased during the financial year,
due to the organic growth of the portfolio.

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Notes to the Consolidated Financial Statements

16

17

18

19

20

21

22

23

24

25

26

27

28

29

Notes to the Consolidated Financial Statements

Carrying
amountTotal

On demand

Up to threemonthsThree totwelvemonths

One to five
years

Over five
years

£000

£000

£000

£000

£000

£000

£000

Cash and cash equivalents

7,052,609

7,052,609

7,052,609

—

—

—

—

Government bonds – held tocollect and sell

1,236,481

1,236,481——

1,236,481——

Trade and other receivables

198,750

198,750

3,105

195,645———

Loans and advances tocustomers

17,816

17,816

—

3,200

449

7,767

6,400

Derivative financial assets

9,294

9,294

—

9,294

—

—

—

8,514,950

8,514,950

7,055,714

208,139

1,236,930

7,767

6,400

Customer liabilities

7,361,196

7,361,196

7,361,196

—

—

—

—

Trade and other payables

130,797

130,797—

130,797———

Derivative financial liabilities

2,454

2,454

2,454

—

—

—

—

Lease liability

14,24615,196

—

1,261

4,391

9,403

141

Loans and borrowings

122

122

—

—

122

—

—

Total financial liabilities

7,508,815

7,509,765

7,363,650

132,058

4,513

9,403

141

Net liquidity gap(307,936)

76,081

1,232,417(1,636)

6,259

Cumulative liquidity gap(307,936)(231,855)

1,000,562

998,926

1,005,185

Financial assets

Total financial assets

17

18

19

20

21

22

23

24

25

26

27

28

29

Foreign exchange risk, including commodities

31 December 2021*

Group

16

Financial liabilities

The Group provides foreign exchange to its customers via multi-currency wallets that allow spending in different currencies. It isthus exposed to currency exchange rate fluctuations. The Group is exposed to foreign exchange risk arising from various corporate
activities and stemming from revaluation of contractual cash-flows or assets and liabilities denominated in foreign currencies.
The foreign exchange exposure is monitored on a daily basis to ensure the effective management of this risk.
The foreign exchange exposure of the banking book arises from the Treasury function activities. This includes profit on the banking
products, interest earned on nostro balances and various costs (all in non-functional currency).
The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities at the reporting dateare as follows:Group

Monetary assets

Monetary liabilities

Net position

£000

£000

£000

GBP

1,296,224(3,364,041)(2,067,817)

EUR

8,954,383(6,017,588)

2,936,795

USD

1,516,886(1,844,962)(328,076)

Other currencies

2,093,370(1,576,130)

517,240

Total

13,860,863(12,802,721)

1,058,142

£000

£000

£000

GBP

2,340,409(1,918,135)

422,274EUR

4,484,902(3,537,844)

947,058

USD

970,028(1,060,768)(90,740)

Other currencies

737,748(965,712)(227,964)

8,533,087(7,482,459)

1,050,628

At 31 December 2022

At 31 December 2021

*These comparative figures have been restated to include all financial assets and liabilities (trade and other receivables, trade andother payables, current tax liability, and loans and borrowings).

Total

The Company does not have any financial instruments as at 31 December 2022 (2021: £nil).

The Group uses currency derivatives to manage currency risk. Please refer to Note 28.4 for details about Group's derivative
positions.

29.3. Market risk

The Group also provides customers the ability to acquire commodities and cryptocurrencies. As the Group acts in a broker
capacity, it is only exposed to price fluctuations for these instruments during the course of trade settlement.

Market risk is the risk that the fair value or future cash flows of financial instruments will fluctuate due to changes in market
variables such as in interest rates, credit spreads, commodity prices, equity prices and foreign exchange rates.
The Group’s market risk management policies and procedures provide effective and robust mitigation. The Group monitors its
exposures continually, using automated Key Risk Indicators ('KRIs') and associated processes reviewing metrics such as Value atRisk, FX stress tests for crypto currencies, FX profit and losses and interest rate risk. The Group makes hedging transactions as
appropriate. Key decisions are subject to review and approval by the Asset and Liability Committee ('ALCO').
The market risks for the Group have remained stable and well contained. While the Group has grown significantly, the processes
have remained robust, accurate and reliable. The Group expects the processes and market risk exposures to remain broadly
consistent over the next year, although the Group anticipates that market risk will grow over time as the Group further rolls out its
credit offering, increasing its exposure to interest rate risk, and as its investment portfolio grows and includes more types of liquid
assets. The Group is exposed to the market risks below.

The Company does not have any monetary assets or liabilities as at 31 December 2022 (2021: £nil).
Foreign currency sensitivity analysis
The Group’s foreign currency risk is managed centrally by the Group’s Treasury team and the Market Making execution desk. FX
risk is monitored on an ongoing basis by using a stress testing approach broadly equivalent to Value at Risk but focused on risk
drivers specific to Revolut’s business model:⚫ FX risk arising from open non-GBP currency positions that include both fiat and crypto currencies, and,⚫ Interest rate risk arising from instruments that are accounted for at fair value.
Under the severe stress test, a loss of £67.7 million (2021: £19.4 million) would arise if the EUR depreciated by 9.7%, USD depreciatedby 10.3% and JPY depreciated by 8.9% against GBP.

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Notes to the Consolidated Financial Statements

16

17

18

19

20

21

22

23

24

25

26

27

28

29

Notes to the Consolidated Financial Statements

16

17

18

19

20

21

22

23

24

25

26

27

28

29

Hedge on net investment in foreign operations

Interest rate risk

The Group hedges the currency risk of its net investment in its euro-denominated foreign operation in Lithuania using GBP:EUR
foreign currency swaps entered into with a third party.

Interest rate risk in the banking book ('IRRBB') is the risk that the Group’s Consolidated Statement of Financial Position andprofitability is structurally exposed to unexpected movements in interest rates. This risk stems from maturity and repricing
mismatches between assets and liabilities, which would materialise with changes in the shape of the yield curve ('gap risk'), orfrom interest rate related options embedded in those that might affect future cash flows ('option risk'), or with changes in therelationship between various yield curves ('basis risk').

The hedge of net investment in foreign operation was discontinued in May 2022 when the hedging instruments matured. The
cumulative gains or losses recorded in equity remain in the net investment in foreign operation reserve until the foreign operation
is disposed of.
Derivatives designated in net investment hedging relationships:

Changes in fair value of hedging instruments used for measuring
hedge ineffectiveness

Carrying Amount

FX Swaps

Carrying amount

Outstanding notional

Effective portion
recognised in OCI

Hedge
ineffectivenessrecognised in profit
or loss into otherincomeReclassified
into profit orloss into other
Revenue

£000

£000

£000

£000

£000

At 31 December 2022——

(1,275)——

At 31 December 2021

2,404

174,680(3,365)——To quantify the IRRBB, the Group uses two metrics: net interest income ('NII') sensitivity and economic value of equity ('EVE')
sensitivity. NII is computed as the impact of parallel shock in interest rates on the net interest income generated by the banking
book items based on their repricing profiles. EVE is assessed through a measurement of changes in the net present value of theinterest rate sensitive instruments (excluding Common Equity Tier 1 ('CET1') instruments and other perpetual own funds) over theirremaining life resulting from interest rate movements assuming six different shock scenarios.
In line with regulatory guidelines and internal judgment, a floor is prescribed for downward shocks to stop the simulated interest
rates from being unrealistically negative.
Both metrics are managed against a control framework, which is defined with set limits in place. The Treasury function is
responsible for IRRBB management on an on-going basis using mitigation approaches such as the use of hedging and dynamic
adjustment of in-app rate offerings to influence uptake behaviour. Interest rate characteristics of funding are matched as far as
possible to lending and investments into securities. The Risk Management function closely monitors IRRBB exposures, proposes
limits and calculation assumptions, and performs stress testing. Any breach of the limit is escalated to the senior managementwith mitigating actions taken.
The following table shows the sensitivities under NII and EVE approach at the Group consolidated position.

The following table shows the maturity of the hedging instruments:

Carrying amountOn demand

Up to threemonthsThree to twelve
months

One to five years

Over five years

£000

£000

£000

£000

£000

£000

At 31 December 2022

—

—

—

—

—

—

At 31 December 2021

2,404

—

2,404

—

—

—

FX Swaps

Group

2022

2021

Net interest income based approach

£000

£000

200 bps parallel increase

225,480

42,900200 bps parallel decrease(135,290)(14,700)

200 bps parallel increase

2,110

22,600200 bps parallel decrease(17,540)(10,100)

Economic value of equity based approach

29.4. Capital risk management
Capital risk is the risk that the Group and its individual entities do not hold adequate financial resources to support their businessactivities based on its regulatory requirements and risk profile.
At the Group level, Revolut is not regulated as a banking group as at 31 December 2022, but has been following the banking
regulations to ensure the sufficiency of the quality and quantity of capital surplus. Revolut Bank UAB ('RBUAB'), Revolut's banking
subsidiary, is an EEA regulated bank with regulatory capital requirements in accordance with the EU Capital Requirements
Regulation ('CRR') and the Capital Requirements Directive ('CRD'). Both Revolut Group and RBUAB have the following controls inplace to ascertain capital risk is effectively managed.
⚫ The Internal Capital Adequacy Assessment Process ('ICAAP') is an annual exercise that aims to identify the adequate level ofcapital required to execute the firms business plan over a specified planning period. This covers the stress tests on a few stressscenarios, both externally prescribed and internally designed, to ensure enough capital buffers are in place to survive throughthese scenarios.

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Notes to the Consolidated Financial Statements

16

17

18

19

20

21

22

23

24

25

26

27

28

29

Notes to the Consolidated Financial Statements⚫ The use of Key Risk Indicators ('KRIs') to provide early-warning indications on upcoming stresses. These KRIs cover a wide
range of factors that could increase capital risk, including but not limited to capital ratios, leverage ratios, and movements on
those ratios. Different levels of risk appetite are set to KRIs, and prescribed actions are linked to the breach of each level toprovide immediate resolution to various events.

29

30

31

32

33

34

35

30. Notes to the Cash Flow Statement
Significant non-cash transactions from investing and financing activities are as follows:⚫ The list of available and feasible management actions is continuously reviewed to ascertain that should the stress happens,
Revolut is able to restore its capital position.
⚫ Revolut continuously review its investment portfolios to ensure the changes in the market conditions are understood and theportfolios are adjusted to align with the risk appetite.
⚫ The investments in subsidiaries are reviewed quarterly to make sure all the subsidiaries are and will continue to be adequately
capitalised.

Group

Acquisition of right-of-use assets

2022

2021

£000

£000

747

302

Reconciliation of movements of liabilities to cash flows arising from financing activities
As of 31 December 2022, the total capital requirement of RBUAB (in accordance with the regulatory requirements) is equal to 10.9%
for CET1 capital ratio and 14.4% for total capital ratio.
Loans andborrowings

Leaseliability

Total

£000

£000

£000

At 1 January 2022

122

14,246

14,368New leases entered into during the year

—

747

747

Lease payments made in the year—

(5,639)(5,639)Unwinding of discount

3

550

553

Impact of movement of foreign exchange rates

9

58

67

Other

—

(321)

(321)

Loans repaid

(98)

—

(98)

At 31 December 2022

36

9,641

9,677

81,812

24,927

106,739

—

(206)

(206)

Group

Actual common equity Tier 1 (CET1) capital
Other capital instruments
Total capital

Risk-weighted assets

2022

2022

2021

2021

ActualRequired

ActualRequired

325,918

160,467

76,7152,268—

51,510——325,918

211,977

76,7152,268

1,472,060

20,580

CET1 capital ratio

22.1%

372.8%

Total capital ratio

22.1%

372.8%

At 1 January 2021

The RBUAB has complied in full with all of its regulatory capital requirements during 2022 and 2021.
Revolut Ltd, Revolut's biggest non-banking subsidiary, is an FCA regulated e-money institution, and its capital is subject to the
Payment Services Directives 2017 (PSD2), and regular Financial Resources Review by the FCA.
To manage its capital risk, the controls are as follows:

Changes to existing lease agreements
New leases entered into during the year

—

232

232

Existing leases derecognised—(5,520)(5,520)

Lease payments made in the year—

(5,640)(5,640)

Unwinding of discount

—

900

900

⚫ Perform quarterly bottom up forecast on e-money balance and manage capital position to meet the associated requirements
plus internal management buffer.

Impact of movement of foreign exchange rates(2,402)(447)(2,849)Loans repaid(79,410)—(79,410)⚫ Sensitivity analysis and scenarios on e-money balance and associated capital requirements are performed monthly tounderstand the potential capital needs in the entity. The capital resources and management actions are then reviewed toensure that under each scenario, the capital surplus remains positive.

Loans included in acquisitions

122

—

122

At 31 December 2021

122

14,246

14,368⚫ The use of KRIs to provide early-warning indications to monitor the timely movement in e-money balances and capital position.

31. Capital and Other Commitments
As at 31 December 2022, the total committed but undrawn facilities in respect of consumer credit cards and loans were £31.5
million (2021: £7.7 million).
The Group and the Company does not have any other material commitments, capital commitments, or contingencies at 31
December 2022 and 31 December 2021.

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Notes to the Consolidated Financial Statements

29

30

31

32

33

34

35

Notes to the Consolidated Financial Statements

29

30

31

32

32. Transactions with Related Parties

33. Events after the Balance Sheet Date

Related parties of the Group and the Company include subsidiaries and key management personnel. Key management personnel
include all persons across the group who together have authority and responsibility for planning, directing and controlling theactivities of the Group.

US investment advisor licence

Balances and transactions between the Company and its subsidiaries, which are related parties, have been eliminated on
consolidation and are not disclosed in this note. Information for key management personnel compensation and particulars oftransactions with related parties are tabulated below, in accordance with the requirements of IAS 24 Related Party Disclosures.

2022

2021*

£000

£000

Wages and salaries

3,082

2,060

Share-based payments

19,803

12,818Social security costs and other benefits

519

275

Contributions to defined contribution pension schemes

64

923,46815,163

Total compensation to key management personnel

33

34

35

In February 2023, Revolut was granted an investment advisor licence by the Security & Exchange Commission which will support
the growth of Revolut's US Wealth and Trading business.
Liquidity facility
In April 2023, Revolut entered into a £75.0 million liquidity facility with an external lender to provide diversification in funding as thebusiness grows globally. The share capital of Revolut NewCo UK Ltd has been provided as a security for the Agreement. As a result,should an event of default occur the share capital of the Revolut NewCo UK Ltd would transfer to the lender. The facility remains
undrawn and there are no plans to draw upon it.
Brazil expansion
In May 2023, Revolut was granted authorization by the Central Bank of Brazil to operate as a Direct Credit Society (SCD) in the
country. The strategic licence will allow Revolut to expand its portfolio of products and services in the Brazilian market.
New Zealand expansion*The total compensation paid to key management personnel has been restated to include additional compensation remitted toinvestment vehicles controlled by Director KMP members and paid to certain non-Director KMP members, which more accurately
represents the aggregate value of compensation fairly received or receivable by KMP members. This restatement resulted inchanges to wages and salaries (previously reported as £0.7 million), share-based payments (previously reported as £3.1 million),social security cost and other benefits (previously reported as £nil) and contributions to defined contribution pension schemes(previously reported as less than £0.1 million).
During the year ended 31 December 2022, the aggregate value of related party transactions other than key management personnel
compensation was £nil (2021: £nil).

In July 2023, Revolut launched its app and services in New Zealand following successful completion of testing.
Board member appointment
In November 2023, Revolut announced the appointment of Dan Teodosiu to the Board as a Non-Executive Director. Please see theBoard of Directors section on page 60 for Mr Teodosiu's biography.

34. Controlling Party
The Company is owned by a number of private shareholders and companies, none of whom own more than 25% of the issued
share capital of the Company. Accordingly, there is no parent entity nor ultimate controlling party by virtue of shareholding. Nik
Storonsky is considered a person with significant control ('PSC').

35. Capital (unaudited)
Per Capital Requirements Regulation ('CRR'), Revolut Group Holdings ('RGH') is not subject to prudential consolidation requirements
as at 31 December 2022. The capital requirements only apply on an individual basis, mainly from Revolut Bank UAB and Revolut Ltd,as well as other smaller regulated entities.
As at 31 December 2022, Revolut Group Holdings Ltd had total available capital to invest into entities, all of which qualifies as
Common Equity Tier 1 ('CET1'), of £1.2 billion (2021: £1.1 billion).

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Glossary
Adjusted EBITDA

Administrative Expenses

APP

Auditor

EBITDA stands for Earnings Before Interest, Taxes, Depreciation and Amortisation. Adjusted EBITDA also excludes
Share-based Payments. It is a widely used measure of core profitability.

FCA

Financial Conduct Authority, the regulator of financial conduct in the UK

IBAN

International Bank Account Number, an internationally agreed system of identifying bank accounts that allows
cross-border transactions.

ICAAPInternal Capital Adequacy Assessment Process, the process to determine that the firm has adequate levels ofcapital to mitigate risks in order to execute its forward-looking business plan.

ILAAPInternal Liquidity Adequacy Assessment Process, the process to determine that the firm has adequate levels of
liquidity to mitigate risks in order to execute its forward-looking business plan.

KPI

Key Performance Indicator, a quantifiable measure of performance relating to a specific objective.

KRI

Key Risk Indicator, a measure of exposure to a specific risk at a given time.

The ongoing costs incurred from the day-to-day running of the business

Authorised Push Payments, electronic payments where a customer initiates and authorises the transfer of funds
from their account to another party. It is often used for online banking and mobile payments.

An organisation or individual responsible for reviewing a company’s financial records and expressing an opinion
regarding whether those records are free from material misstatement

Balance Sheet

A statement of financial position that provides a picture of a company’s assets, liabilities and owners’ equity. It gives
an indication of a company’s financial health.

KYC

Know Your Customer, a regulatory requirement in the financial industry. It involves verifying the identity of customers
to prevent fraud, money laundering and other illegal activities by collecting and verifying personal information.

Bank Deposits

The sum of balances in customer accounts on Revolut Bank UAB (our European entity) — excludes investments
such as Stocks, Crypto, Commodities and Savings.

Liquidity

The ease with which an asset or security can be converted to ready cash

Material Risk Taker
BNPL

Buy Now Pay Later, a way to buy goods on credit and pay for them at a future date, often in instalments

A staff member’s professional activities are deemed to have a material impact on a company's risk profile or theassets of a company in accordance with applicable regulations.

Control Function

A function (including, but not limited to, a risk management function, compliance function and internal audit function)that is independent from the business it controls and that is responsible for providing an objective assessment of
a company's risks, and for reviewing and reporting on those risks.

Merchant Acquiring

Merchant acquiring is the process of enabling businesses to accept payments from customers, such as debit andcredit card transactions, at the point of sale.

Management Information

Management Information ('MI'), the reporting that conveys data points to leadership for effective management.

Debenture

A type of long-term debt instrument representing a long-term borrowing by a company. It acknowledges a debt
and provides specific terms for interest and principal payments. Debenture holders are essentially creditors of theissuing entity.

Peer-to-Peer Payments

Also known as P2P, a mechanism by which a customer can transfer funds from their bank account to another via
the internet

The sum of balances in customer accounts, excluding savings and investments (e.g. Crypto, Trading, Commodities).
There are two types of Deposits: 1. E-money Deposits and 2. Bank Deposits.

POS

Point of Sale, often used to describe the terminal in retailers where payment is taken

Revolut Bank UAB

Our legal entity in Lithuania that operates our Bank for customers in the EEA

Revolut Ltd

Our legal entity in the UK, primarily for UK and Swiss customers

Risk Appetite Statement

The Board Risk Appetite Statement ('RAS') is the expression of the level of risk that Revolut is prepared to accept inorder to deliver on its vision and strategy.

ROI

Return on Investment, a measurement of an investment’s gains against its costs. It is a performance measure used to
calculate the efficiency of an investment.

Safeguard

Safeguard or Safeguarding means customers' funds are segregated from the the EMI’s own funds to ensure that any
financial turbulence at the EMI will not put customer money at risk. Customer funds are deposited into a client moneybank account held on behalf of customers. The Group maintains client accounts with a range of global tier 1 banks.

Unsecured Personal Loans

Loans that don’t require the customer to offer any form of security to the lender as collateral. They are granted basedon a customer’s creditworthiness.

Deposits

Direct-to-card Transfers

Direct-to-card transfers enable the direct and immediate deposit of funds onto a debit or credit card, allowing
users instant access to the transferred funds.

DTA

Deferred Tax Assets ('DTAs') and liabilities arise where there are temporary differences between the carrying
amount of an asset or liability and its value for tax purposes. Revolut has recognised net deferred tax assets in the
FY22 period, mainly consisting of tax losses and future deductions for equity-based compensation. DTAs may only
be recognised to the extent that it is probable that there are sufficient future taxable profits; Revolut is therefore
able to recognise DTAs in the group entities for which this criteria applies.

Earnings

Earnings is another word for profit or net income. It is traditionally the bottom line of the income statement (alsoknown as profit or loss statement).

E-money Deposits

The sum of balances in customer accounts on Revolut Ltd (primarily UK and Swiss customers) — excludes
investments such as Stocks, Crypto, Commodities and Savings

E-money Institution

E-money Institutions ('EMIs') are regulated by the Financial Conduct Authority (FCA) and must safeguard customer
funds

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Company Information
Company Name

Revolut Group Holdings Ltd

Directors

Martin Gilbert (Chair)
Nikolay Storonsky (Nik) (CEO & Co-founder)
Vladyslav Yatsenko (Vlad) (CTO & Co-founder)
Michael Sherwood (Independent Non-Executive Director andChair Remuneration Committee)
Caroline Britton (Independent Non-Executive Director andChair Audit Committee)
Ian Wilson (Independent Non-Executive Director)
John Sievwright (Independent Non-Executive Director andChair Risk & Compliance Committee)
Dan Teodosiu (Independent Non-Executive Director)

Company Secretary

Thomas Hambrett

Registered Number

12743269

Registered Office

7 Westferry Circus
Canary Wharf
LondonEnglandE14 4HD

Independent Auditors

BDO LLP
55 Baker Street
LondonEnglandW1U 7EU

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