Online bank N26 is pulling out of the US, an abrupt reversal of strategy for the once high-flying fintech now under fire from German regulators. The Berlin-based bank, which was valued at €7.8bn last month, said the decision would allow it to “sharpen its focus on its European business”.
The retreat comes a week after Germany’s financial watchdog BaFin imposed a draconian cap on N26’s growth, banning the bank from taking on more than 50,000 new customers a month until it had put in place “a proper business organisation” and addressed “risks to the institution’s operational resilience”. The restriction follows a public rebuke from BaFin in May for poor anti-money laundering controls and a €4.25m fine for the late filing of suspicious activity reports. In an unprecedented move, BaFin has mandated two special commissioners to oversee the bank’s efforts to fix the problems.