The headquarters of the Neobank in Berlin.
(Photo: Solarisbank)
Frankfurt The German financial regulator Bafin has prescribed higher equity for Solarisbank. The reason for the measure was a violation of the requirements for proper business organization, according to the statement from the authority on Tuesday. One paragraph referred to by the Bafin relates to organizational obligations, the other to the outsourcing of banking activities.
The background is a bank supervisory audit from 2020, which had identified some serious deficiencies at the Berlin neobank, for example in compliance. If banks have organizational deficiencies, it is more common for supervisors to demand higher capital. The BaFin measure was decided at the end of December last year as part of a regular risk analysis – and has now been published.
A Solarisbank spokesman said on request that Bafin’s notification referred to the recently communicated audit for 2020 “and the associated processing plan”. “With a core capital ratio of almost 30 percent at the end of 2021, Solarisbank meets the additional equity requirements,” said the spokesman.
The Handelsblatt had already reported exclusively in January that Bafin was sending a special auditor to Solarisbank.
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Since taking office, the new Bafin President, Mark Branson, has been trying to turn the authority into a “supervision with a bite”. Last year, the authority sent a special auditor to N26 – and at the same time limited growth to 50,000 new customers across Europe per month. In addition, the financial supervisory authority publishes measures that it has taken more frequently.
backing from politics
The authority’s increasingly harsh approach is causing more and more banks and financial start-ups to feel uneasy, but enjoys the backing of the new federal government. “The Bafin should be a decision-making authority,” emphasized Florian Toncar (FDP), Parliamentary State Secretary in the Ministry of Finance, in January to the Handelsblatt.
Solarisbank offers its banking license to other fintechs, which enables them to acquire customers more quickly. The latter can offer financial services under their own flag, with Solarisbank always standing in the background. The bank intends to offer over 20 million accounts in Europe within five years.
The most important project in the coming months, however, is the IPO. Going onto the floor is possible from the beginning of the third quarter, said Solarisbank boss Roland Folz at the beginning of the year in an interview with the Handelsblatt. An important prerequisite for this is a stable capital market environment. By then, however, it may be even more important for the neobank to resolve the problems with supervision.
More: Solarisbank is growing rapidly – Bafin sends special auditors