The co-founder of N26 is set to resign from the chief executive position to join the bank’s supervisory board. This change follows mounting tensions between the bank’s founders and its investors. Recent actions by BaFin, Germany’s financial regulatory authority, have also added pressure, with the regulator expressing new concerns about compliance, including potential sanctions against the bank, which serves over 200,000 customers in Ireland.
The planned transition appears to be linked to discussions between the founders and the investors. The co-founders together hold approximately 20% of the bank and are contemplating relinquishing certain voting rights that enable them to have veto power over significant decisions. In exchange for giving up these rights, investors might agree to lower returns on their investments.
N26 was valued at an impressive €7.7 billion in 2021, with a fundraising arrangement that promised investors a guaranteed annualised return of 25%. Investor dissatisfaction is reportedly growing, and there are suggestions that leadership changes may soon take place. While one co-founder continues to maintain their executive role for the immediate future, there are indications that they too may resign eventually.
The current chairman is being considered as a possible interim co-CEO amid the discussions regarding leadership alterations. Meanwhile, the remaining co-founder is reportedly committed to fulfilling his current responsibilities.
The governance structure of N26 comprises both a management and a supervisory board. The management board is responsible for day-to-day operations, while the supervisory board oversees broader strategic matters, including executive appointments. The departing co-founder has expressed that they had been contemplating this change for a while and will transition over the next six months, indicating that the supervisory role will differ significantly from that of chief executive. Recent speculations about their exit seem to have influenced the timing of this decision.
The evolving situation within N26 highlights ongoing challenges faced by the bank, as it navigates regulatory scrutiny and investor expectations amidst the dynamic landscape of digital banking.