By PAUL O’DONOGHUE, Senior Correspondent
DIGITAL bank N26 has been blocked from issuing new mortgages in the Netherlands over AML concerns, in a new order from Germany’s BaFin watchdog.
The regulator also ordered N26 to appoint a new compliance monitor.
In a statement, BaFin said a ‘special audit’ conducted in 2024 revealed ‘serious deficiencies’ at N26.
“In particular, in risk and complaint management and in the organization of the lending business,” it said.
“BaFin has imposed additional capital requirements and business restrictions on the institution. [N26] is no longer permitted to conduct new mortgage lending business in the Netherlands.
“BaFin has also appointed a special representative who will monitor compliance with these measures and report to BaFin.”
N26 said that it was “in close and constructive communication with the supervisory authorities as well as the appointed special representative”.
The measures also mark the second time since 2021 that BaFin has ordered a special monitor to oversee the fast-growing Berlin-based bank.
N26 regulatory issues
The move is a major blow to N26, one of Europe’s fastest-growing digital banks.
The firm has repeatedly faced regulatory issues restricting its growth over compliance and AML concerns.
These include a limit on new customers at 50,000 per month. BaFin’s co-founder Valentin Stalf previously said these restrictions have likely cost N26 ‘billions’ or euros in lost growth.
In August, Stalf said he would step down as co-CEO and join the supervisory board. A new chief risk officer was also appointed starting on December 1.
The bank this year doubled the size of its supervisory board to six, installing a new chair who once sat on the board of Germany’s central bank.
In its most recent funding round in 2021 — before BaFin announced it was taking action — N26 was valued at €7.7 billion.
N26, which reports more than 8 million customers, says it does business in 24 countries, mainly in Europe.
Separately, BaFin also said that it fined €15,000 in an order dated March 18, 2025. “The bank had failed to inform BaFin that the supervisory board had not properly and expressly approved a loan granted to an executive member within four months of the contract’s conclusion,” it said.
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