The lifting of restrictions by German watchdog BaFin on N26 has resulted in a substantial increase in demand, allowing the digital lender to achieve its first quarterly profit.
BaFin had previously imposed a temporary limit on the number of new customers N26 could onboard in 2021 and imposed a €9.2 million fine due to inadequate money laundering controls. The cap started at 50,000 new customers each month and was increased to 60,000 last year. Currently, N26 reports that it is now acquiring over 200,000 customers monthly, which positions the company for significant revenue growth this year, with projections indicating an approximate 40% increase to around €440 million for fiscal 2024, compared to €313.5 million in FY-23.
Having achieved monthly breakeven in June 2024, N26 has recorded its first quarterly profit, posting a net operating income of €2.8 million for the third quarter of 2024. In contrast, the company recorded a net operating loss of €78.3 million and a net income loss of €102.4 million for 2023, reflecting its strategic investments in compliance and infrastructure to combat financial crime. This performance shows a notable improvement from 2022, when losses totaled €169.3 million in net operating income and €213.4 million in net income.
Since early 2024, N26 has launched significant updates across its core offerings—spending, saving, investment, and credit—and has introduced stock and cryptocurrency trading services. Additionally, the company plans to provide digital banking solutions for businesses in the upcoming year and has opened a waitlist for interested customers.
Valentin Stalf, co-founder and CEO of N26, expressed enthusiasm about meeting the growing demand for their digital banking products: “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.”