In February, Revolut became Europe’s joint most valuable fintech after a $500m investment round © REUTERS

Richard Davies, the banking veteran brought in to lead Revolut’s efforts to “grow up” after a wave of criticism, is leaving the company to run a new banking start-up.

Mr Davies will take charge of business lending specialist Allica Bank late next month, subject to regulatory approval.

“In the aftermath of Covid, it’s such an important time for the UK small and medium-sized business market, and the chance to lead a newly licensed bank that can be part of the solution is a great opportunity,” Mr Davies said.

Mr Davies joined Revolut a year ago with a mission to strengthen the digital banking group’s governance and help it move it on from a series of controversies around compliance and an aggressive internal culture.

Critics have previously pointed to high executive turnover as a sign of problems within the company, but Mr Davies said he was leaving on good terms.

“It was a difficult decision . . . and I wouldn’t want to transition if we hadn’t already made massive progress,” he said.

Revolut said Mr Davies will continue to serve as an adviser to its European business, and will remain a non-executive director of its international holding company.

In February, Revolut became Europe’s joint-most valuable fintech after a $500m investment round. Last week it raised a further $80m at the same $5.5bn valuation, despite the significant revenue hit caused by the pandemic.

Allica, which is controlled by UK investment group Warwick Capital Partners, received its full banking licence last September and opened its first savings accounts earlier this year. 

It is the latest in a string of new banks that have received licences since the financial crisis, but its predecessors have struggled to break the dominance of the largest high street lenders. Last week the Bank of England warned that “many of these new banks have underestimated the development required to become a successful and established bank”.

Mr Davies said the business lending market had been further damaged by the coronavirus crisis, creating an opportunity for Allica. 

“There is a disruption to the market that needs solving urgently,” Mr Davies said. “There’s great demand from good businesses that aren’t as impacted by coronavirus . . . [and] there is no one really that’s trying to provide a solution.”

Mr Davies previously held senior commercial banking roles at HSBC, TSB, and Barclays, and was the first chief executive of OakNorth Bank

John Maltby, Allica chairman, said: “As a respected leader and innovator of business banking and fintech, Richard’s appointment is testament to Allica Bank’s progress.”

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