Berlin-based smartphone bank N26 expects its existing growth limit of 50,000 to 60,000 new customers per month to be raised soon by financial regulator BaFin. N26 founders and co-chiefs Maximilian Tayenthal and Valentin Stalf wrote this in an email to investors. According to the statement, they expect the restrictions to be adjusted soon. However, BaFin has so far only held out the prospect of a relaxation, an insider said.
“We can confirm that we have informed our investors about the recent discussions with Bafin and an advised increase of the growth restriction,” an N26 spokeswoman said. “We welcome the constructive and fact-based approach of the regulator and in particular the very close cooperation. We consider an increase in the growth restriction as recognition of our work to date and are confident that further relaxations will be made in the coming months in line with progress.”
The communication from N26 comes at an unusually early time. This is because a final decision has not yet been made, as a person familiar with the matter admitted. BaFin has so far only held out the prospect of a relaxation. A gradual increase in the growth limit has been discussed at N26 for some time, insiders said. The aim, they said, was to allow the company to take on more customers more quickly without immediately lifting the new customer cap altogether. This would also keep it a calculable risk for the regulator.
Related N26 is among the most valuable fintechs in Germany. In its last financing round in 2021, the smartphone bank was valued at €7.7 billion.
BaFin special auditor N26 has had a special auditor at the company since November 2021. The financial regulator believes that N26 has grown too quickly for many years and has not developed its processes and controls accordingly. Since then, the Berlin-based company has also only been allowed to take on a maximum of 50,000 new customers per month. Next year, N26 wants to be in the black for the first time – even if the growth restrictions should still exist then.
“I don’t expect that to happen. But even if it does, I expect us to be profitable in 2024,” Tayenthal said in an interview with Handelsblatt in July.
