Revolut's audited return on equity is 26.7%, Zubin Vandrevala calculates, far below the 40 to 50% Nik Storonsky claims once excess capital is stripped out.
Revolut keeps a loan-to-deposit ratio near 6%, while typical banks run near 100%, which limits its lending but keeps its risk low.
Revolut's listing could raise up to $200bn in London and New York, with reported amended articles that would remove a borrowing cap and an independent board veto.
Revolut's $115bn bet on a low-risk bank built for scale
Revolut is a $115bn bet that a bank built on fees, little lending and one global stack can scale to 100 countries. The model gives low credit risk and a strong return on equity, though lower than the founder claims. Its tests are rate cuts, compliance and a founder who keeps tight personal control into a listing.
Takeaways
Revolut runs a low-risk, fee-driven balance sheet. Revolut's loan-to-deposit ratio is 6%, against about 100% at a typical bank. Most assets are cash and reserves, so risk weights are low. Cost of risk is 158 basis points, against 520 at lending-heavy Nubank.
Audited returns are strong but below claims. Zubin Vandrevala calculates audited return on equity at 26.7%, from about £1.3bn net profit over £4.9bn equity, not the 40 to 50% Storonsky claims. Aman Narain says that is still a very good bank.
One global stack makes each new country cheap. Aman Narain argues the marginal country is incredibly cheap because Revolut runs one global stack. It has 40 live countries and aims for 100, while Standard Chartered is selling retail businesses in several African markets.
Rate cuts threaten Revolut's float income. Mexico's 15% savings rate is a customer acquisition tool costing under $12 per account, aimed at 550,000 accounts by August on $167m of capital. Rate cuts would hit float revenue, and Wise's slowing growth is cited.
Storonsky runs Revolut through intense personal control. Storonsky has more than 40 direct reports, a weekly chalkboard-style review and compliance scores tied to team bonuses, and he ran engineering hiring himself. Aman Narain says staff are only as good as their last month.
Fines and freezes test Revolut's compliance. Fines include 11.5m euros from Italy's competition authority, and the ECB and Bank of Lithuania froze new retail products. Still, Zubin Vandrevala says UK and French licences and conditional US approval within six months show supervisors do not see Revolut as out of control.
The listing could value Revolut near $200bn. Revolut's valuation rose from $75bn to $115bn in July, and a float of up to $200bn is possible. Storonsky's reported 28.7% stake is worth about $33bn, and amended articles reportedly remove an independent board veto.
Is Storonsky the next Musk
Aman Narain says Storonsky is the next Elon Musk because he is trying to change what a bank is for. Revolut's board has reportedly modelled his next pay package on Musk's and on Renee Haas's at Arm.
Zubin Vandrevala says Musk bets his companies on physics, while Storonsky refuses to bet his own credit. He argues the zero-risk claim was always about credit, not operations.
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