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Investors in N26 are moving to unseat the German digital bank’s two founders from the top job after the country’s financial regulator once again faulted its risk controls, people familiar with the talks said.
The plan, under negotiation, would see co-founder and co-chief executive Valentin Stalf leave by September 1, with fellow founder Max Tayenthal following him out by year-end, according to people briefed on the matter. Supervisory board chair Marcus W. Mosen, a veteran of the European payments industry, is expected to step in as interim co-CEO.
The push comes after a special audit by BaFin identified “weaknesses in the internal control systems, processes and overall organisation,” N26 disclosed in its annual report. The regulator is preparing formal warnings for two management board members and plans to appoint a special monitor, the people said. BaFin declined to comment.
The latest run-in with Germany’s financial watchdog follows years of compliance troubles for N26. In 2021, BaFin capped the bank’s new customer intake at 50,000 a month and installed a special representative after finding deficiencies in anti-money laundering controls. That limit, later raised to 60,000, stayed in place until June last year. The regulator also fined N26 €4.25mn in 2021 and €9.2mn in 2024 over delayed suspicious activity reports.
The bank, founded in 2013 as Number26 and licensed as a bank in 2016, pulled out of the UK in 2020 and the US in 2021, citing regulatory complexity and a focus on core European markets. It also faced temporary onboarding bans in Italy in 2022 over similar compliance concerns.
For investors, the latest audit findings landed at an awkward moment. N26 had launched a funding round earlier this year to finance the buyout of participants in its 2021 Series E round, who had been promised an annualised return of about 25%. That process has now been put on hold, the people said.
Under the current proposal, Stalf and Tayenthal would give up their special voting rights in exchange for those investors agreeing to accept lower returns on the 2021 commitments.
Mosen, the incoming interim chief, has held senior roles at Concardis, Ingenico and Ogone, and joined N26’s supervisory board as chair last year. Any permanent successor will need BaFin approval.
N26, once valued at about $9bn, has sought to present itself as being on a firmer footing after BaFin lifted its growth cap. The bank reported its first profitable month in June 2024 and a profit in the third quarter, but full-year results remained in the red due to one-off costs.
