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N26 saw revenue (and losses) rise sharply in 2021

Significant investments in AML and fraud prevention cost the digital bank, while BaFin’s restrictions weighed on customer growth.

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Valentin Stalf (right)/N26.

A challenging 2021 was laid bare in the results of Berlin-based neobank N26 yesterday, which posted rising losses and slowing customer growth.

Overall gross revenue grew for the bank, rising 50.3 per cent during the calendar year 2021 to €182.4m, but losses also increased 14.4 per cent to €172.4m

2021 was a challenging period for the bank, during which time the German regulator BaFin first criticised and then fined the bank for anti-money laundering failures. 

Eventually a cap was placed on the growth of new customers, with BaFin limiting N26’s onboarding to just 50,000 new customers a month from October.

In its results today N26 reports adding 1 million new customers in 2021, half of what it managed in 2020 when no such limit applied.

The bank also pointed to the “substantial investments” it has made in strengthening its regulatory frameworks, including in “governance, compliance and fraud prevention”.

Valentin Stalf,N26’s CEO and co-founder of N26, added that the bank made: “further investments in our product, in our team, and in the scalability of our platform.”

As a result, he said N26 is “the mobile bank with the most active customer base in Europe. This is reflected in a significant increase in transaction volume by around 60 per cent to more than €80bn.”

In 2021 N26 also cut short its American dream, with plans to establish the US as a core market scrapped as it battled with the above-mentioned regulatory challenges in Europe.

As part of its 2021 results N26 also revealed that its customer deposits grew 52 per cent to €6.1bn, and of its now 8 million customers, some 3.7m are revenue-generating for the bank.

N26 finished 2021 with a huge $900m (€700m) Series E funding round that the bank says continues to leave it “well-positioned” even “in the face of near-term macroeconomic uncertainty”.

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Valentin Stalf

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