Germany’s regulator BaFin fined flatexDEGIRO €1.05 million for violating supervisory rules

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BaFin, the Federal Financial Supervisory Authority of Germany, recently fined one of the country’s publicly listed online operators. Popularly known as flatexDEGIRO Bank AG, the firm received an €1.05 million fine for breaching banking supervisory regulations, according to the regulator.

In addition to the fine, BaFin also instructed the company to eliminate what it calls “serious lapses” that the regulator noticed in flatexDEGIRO’s internal control regarding supervisory reporting and AML (Anti-Money Laundering) measures. In the meantime, BaFin decided to appoint a representative who will monitor the company’s efforts to improve and implement appropriate measures that the regulator demands.

flatexDEGIRO makes a move to become regulatory compliant

BaFin initially issued the penalty order over ten days ago, on February 17th. It explained that the order is necessary to make sure that flatexDEGIRO bank will take the violation of supervisory rules seriously, and start working on limiting the risks.

In response to the penalty, a flatexDEGIRO spokesperson issued their own statement. The spokesperson said that the company finds the fact that BaFin appointed a special officer extremely helpful. Their presence and insight will surely help the bank with monitoring of the projects right from the start.

The spokesperson further added that the firm has already started the implementation of the initial measures necessary to remedy the lapses that BaFin pointed out. The company reacted quickly and with the process already underway, it should not take long for the issues to be resolved.

Previously, on September 8th last year, Germany’s financial regulator imposed additional capital requirement orders on the bank, as well as the flatexDEGIRO AG financial holding group.

The public reaction to the fine

As mentioned previously, flatexDEGIRO is a publicly listed company in Germany. Its stock is available at the Frankfurt Stock Exchange. As a result, the regulator’s order had a significant impact on the price of the shares, which sank significantly following the publication of the regulatory order. The shares went down by 8.96% last Friday, sinking to €7.07 per share.

The event made flatexDEGIRO’s share one of the weakest in the SDAX index on February 24th. However, the bank’s quick reaction and willingness to comply has turned the investors’ sentiment around, and the firm has seen a 3% increase since the market’s reopening this Monday, February 27th.

The company also recorded quite a significant performance in the last several quarters. Q3 2022, for example, brought a 4.3% increase in revenue, allowing the online broker to earn €91.9 million. There was also a noticeable 25.1% increase in EBITDA, leading up to a figure of €37.6 million. Revenue per transaction also jumped to €5.15, going up by 6.5%.

The company also saw a surge of new users, acquiring more than 376,000 new customer accounts over the course of the first nine months. The period ended with a customer base of over 2.4 million.

 

About Ali Raza PRO INVESTOR

Ali is a professional journalist with experience in Web3 journalism and marketing. Ali holds a Master's degree in Finance and enjoys writing about cryptocurrencies and fintech. Ali’s work has been published on a number of leading cryptocurrency publications including Capital.com, CryptoSlate, Securities.io, Invezz.com, Business2Community, BeinCrypto, and more.