Losses at digital banking business Revolut doubled to £201m last year despite a rise in interest for its cryptocurrency trading service.

Revenues at the London-based banking app rose 34pc to £222m, according to its latest annual report.

The business also said it made £39m from its cryptocurrency service, which lets customers buy and sell digital tokens including Bitcoin directly from the Revolut app.

Revolut has expanded aggressively to become the biggest of London’s breakthrough challenger banks, attracting 14.5m personal account customers compared with Monzo’s 5.2m and 2m accounts for Starling Bank.

The higher losses reflect the company’s costly international expansion to countries including China, India and the US.

Revolut said adjusted operating losses, a figure that includes its cryptocurrency income but excludes share payments, rose to £122m in 2020, up from £98.4m in the previous year.

The start-up’s accounts also revealed that Revolut held more than £537m worth of cryptocurrency on behalf of its clients at the end of last year. The amount held stood at just £93m at the end of 2019.

Revolut also plans to expand its lending business, which is considered a prime route to increasing revenues from all of the UK’s leading challenger banks.

Revolut confirmed in January that it had applied for a full UK banking licence that will enable it to expand its lending products. The start-up also applied for a US banking licence in March, following Monzo which launched its own application there in April 2020.

Revolut users can buy Bitcoin from its app

The impact of the coronavirus pandemic has caused Revolut to rethink its breakneck international expansion and instead carefully plan an entrance to each new market.

“We became much more precise in our plans,” chief executive Nikolay Storonsky told The Telegraph in October. 

“Before, when we were planning things, we were not that precise in terms of the amount of money we needed to make it happen,” he said.

“For example, if we decided to launch in Japan, we never went through a precise business plan in terms of exact costings. We just decided we’ll go to Japan, the market is attractive. Let’s get it done.”

It is unclear when Revolut aims to become profitable. The company previously announced that it broke even in November for the first time but has declined to give a planned date for when it expected generate profits consistently.

Revolut experienced “very strong profitability in the first quarter”, its finance head Mikko Salovaara told The Guardian. “We don’t give any forecasts, but so far so good.”

Challenger banking apps have switched focus during the pandemic from a race to expand to focusing on breaking even and becoming profitable.

Anne Boden, the Starling Bank chief executive, told The Telegraph last year that her business was the first digital banking app to reach profitability with £800,000 of profits in October 2020.

In her annual letter published last August, Ms Boden claimed the pandemic had “exposed those without a clear path to profitability.”

Revolut last raised funding almost a year ago when it brought in $80m in cash that valued the business at $5.5bn.