The lifting of restrictions by German wathdog BaFin on N26 has led to a surge in demand that has helped the digital lender to record its first quarterly profit.
BaFin imposed a temporary cap on the number of new customers the lender was allowed to onboard in 2021 and fined the firm €9.2 million over lax money laundering controls. The cap was set at 50,000 new customers a month before being increased to 60,000 last year.
N26 says it is now signing up more than 200,000 customers per month, positioning the firm for significant top-line growth this year, with revenue set to increase by around 40% to approximately 440 million euros for fiscal 2024 (FY-23: 313.5 million euros).
After first breaking even on a monthly basis in June 2024, the company has posted its first quarterly profit, with a net operating income of 2.8 million euros for the third quarter of 2024.
For 2023, N26 posted -78.3 million euros in net operating income and -102.4 million euros in net income, in line with its guidance. This was a marked improvement from 2022, when the company had posted -169.3 million euros in net operating income and -213.4 million euros in net income, after investing significantly into compliance and the human and technical infrastructure to combat financial crime.
Since early 2024, N26 has introduced a suite of major updates across its core product pillars spending, saving, investment, and credit, and added trading in stocks and cryptocurrencies to its portfolio.
N26 also intends to offer digital banking for businesses in the coming year and has opened a waitlist for prospective customers.
Valentin Stalf, co-Founder and CEO of N26: “We are excited to be able to satisfy the significant demand for our digital banking products again in full. Over the past quarter, we have consciously accelerated our growth engine, delivering profitability for the first time in the bank’s history, and record levels of customer activity. We’re going to expand on this strong momentum.”