Revolut Launches Portuguese Branch and Local IBANs

Back in late June, an article in these pages asked whether Revolut’s bargain for Portuguese customers had vanished, arguing that soaring loan rates and shrinking perks had dulled the neo-bank’s halo. Barely a month later, Revolut has returned to the spotlight with a move designed to silence sceptics and anchor the brand more firmly in Portugal: a full-service Portuguese branch, complete with PT50 IBANs, Multibanco integration, and interest-bearing deposits.

Our earlier critique asked if Revolut’s low-cost ethos was a teaser rather than a long-term promise. Today’s announcement suggests the teaser phase is ending and the long game, which is regulated, local, and unmistakably Portuguese, is about to begin.

What Changes Today?

Until now, every Revolut account opened in Portugal carried a Lithuanian “LT” IBAN. While SEPA rules guarantee cross-border compatibility, many utility providers, tax offices, and local merchants still treat non-PT numbers with suspicion. Customers were forced into bureaucratic detours, such as manual IRS declarations or rejected direct-debit mandates, undermining the frictionless experience fintechs promise.

From this week, all new accounts will ship with a PT50 prefix, and existing clients will be migrated gradually. The company becomes, in regulatory terms, a branch bank supervised jointly by Banco de Portugal and the European Central Bank. Alongside the IBAN switch, Multibanco and MB Way will arrive on the Revolut home screen, ending years of distance from SIBS. Domestic direct debits can now be set up seamlessly, and deposit remuneration will launch later this summer. Revolut is tight-lipped on the rate, but executives hint at a tiered model “north of 1%,” conditional on Metal or Ultra subscriptions.

For its 1.8 million Portuguese clients, the functional leap is significant. For local incumbents, it is another gauntlet thrown across the marble floors of Avenida da Liberdade.

The Path to Lisbon

Revolut first dangled the promise of a Portuguese IBAN in early 2023. Insiders say the actual paperwork amounted to 2,100 pages of prudential filings, stress-test blueprints, and IT security attestations, plus a marathon negotiation with SIBS over access to the Multibanco rails. One sticking point was how to reconcile Revolut’s real-time ledger with SIBS’ nightly batch processing without introducing gaps.

While the branch licence emerges from Banco de Portugal, Revolut will remain capitalised from its Lithuanian parent. That structure mirrors Revolut’s other satellite branches and avoids the cost of a stand-alone Portuguese deposit-guarantee fund. European banking legislation obliges Revolut to ring-fence Portuguese deposits and adhere to national consumer-protection codes.

A Strategic Reset

From Beachhead to Fortress

Our previous analysis argued that Revolut’s Portuguese adventure had hit a credibility wall as interest rates rose and perks receded. The arrival of a domestic branch is the clearest sign yet that management agrees the old model, operating purely from a passported licence, had reached its limits. A PT IBAN not only eliminates a perennial onboarding objection but also thrusts Revolut into direct regulatory sunlight. Banco de Portugal’s consumer-credit rule-book is stricter than Lithuania’s, especially on algorithmic transparency. Revolut’s AI risk engine will now need to explain itself in Portuguese, on paper, within 20 days of any customer query.

Deposits: The Low-Cost Funding Play

Offering interest on current-account balances attracts new money without tapping wholesale markets and builds a liquidity cushion to backstop Revolut’s lending book. In other words, the neo-bank is evolving into a bona-fide retail bank, precisely the transformation our June column suggested was inevitable once cheap teaser rates expired.

Winners and Losers

For consumers, the primary wins are seamless Multibanco and MB Way usage and an end to "foreign IBAN" hiccups. They may also see marginally higher deposit yields than the current offerings from banks like Caixa Geral. On the other hand, a larger regulatory footprint may translate into less agility and slower feature roll-outs.

For traditional banks, this means one more competitor with a local "face" and deposit products. Revolut’s pricing power could force a new round of fee compression on instant-access accounts.

For fintech peers like Wise and N26, this move provides political cover to lobby for their own PT branches. However, the experience bar for localisation has now been raised, and a foreign IBAN may no longer be enough to compete effectively.

The Loan Controversy

Our earlier critique lambasted Revolut for hiking its lowest advertised TAEG from 7.6% to 9.65%. The branch move does not automatically reset those rates, but insiders whisper that a deposit-fuelled war chest could finance sharper loan pricing before Christmas. Whether that generosity materialises, or whether Revolut pockets the margin to rebuild capital after its recent €3.5 million AML fine, is the billion-euro question. Banco de Portugal, for its part, has already hinted that Revolut’s algorithmic scoring will face “ongoing model validation.”

Verdict: A New Chapter, Not a Finished Book

Revolut’s Portuguese branch is not a victory lap; it’s chapter two. The company still has to re-win the trust of price-sensitive borrowers, prove its compliance culture can keep pace with growth, and convince savers that promotional yields won’t suffer the same fate as its travel insurance perks.

But after months of scepticism, today’s news finally matches product rhetoric with local substance. A PT50 IBAN may be a simple string of characters, yet in a country where bureaucracy loves an excuse, those four letters could decide whether Revolut remains a marginal convenience or graduates to primary-bank status for millions. For now, one thing is clear: the neo-bank we once accused of retreating is digging in for the long haul, now onshore, regulated, and unmistakably Portuguese.