Germany's financial regulator has scrapped a capital surcharge it imposed on flatexDEGIRO's bank over failings in its business organization. The online broker announced the decision today (Tuesday).
The Federal Financial Supervisory Authority (BaFin) will also cut the Pillar 2 Requirement (P2R) for the flatexDEGIRO Group by 100 basis points, to 1.50% from 2.50%, flatexDEGIRO said.
The P2R is capital a bank must hold on top of the legal minimum, and BaFin sets it in its regular Supervisory Review and Evaluation Process (SREP).
That requirement stood at 4.25% before December 2024. By FinanceMagnates.com's calculation, it has fallen by 275 basis points, or almost two thirds, in under two years.
The lower bar leaves more room in the capital plan of flatexDEGIRO, which applied to BaFin on October 15 for consent to buy back up to €100 million (about $112 million) of its shares.
London's trading industry is coming home!
Three Reductions in Under Two Years
The cuts unwind measures from a supervisory case that opened four years ago.
BaFin issued the capital orders on September 8, 2022, after a special audit of flatexDEGIRO Bank and its parent. The stock dropped by as much as 38% in a single session that December, when flatexDEGIRO cut its revenue forecast and disclosed the findings, Bloomberg reported.
In February 2023 the regulator fined the bank €1.05 million and ordered it to fix controls over supervisory reporting and anti-money laundering. A special representative appointed by BaFin watched the remediation until his mandate ended on September 30, 2024.
The next day, Oliver Behrens, who had run Morgan Stanley's European bank in Frankfurt, took over as chief executive. BaFin then lowered the requirement to 2.75% in December 2024 and to 2.50% in January 2026, before today's step to 1.50%.
Behrens, now chairman of the management board and CEO, said the removal of the surcharge in particular "confirms the significant progress we have made since the Bafin special audit in 2022."
A Buyback Waiting on the Same Supervisor
Benon Janos, who was named a second CEO in September to run the expansion of the retail trading business, said the lower requirement gives flatexDEGIRO more flexibility in how it allocates capital.
The planned buyback is twice the size of the €50 million program completed in May 2025. It relies on an authorization shareholders granted in June 2024 and needs BaFin's consent under Articles 77 and 78 of the Capital Requirements Regulation (CRR), flatexDEGIRO said on October 15.
Profits have grown in the meantime. flatexDEGIRO earned more than €115 million in net income in the first half of 2026, a first for the company, after second-quarter profit rose 55% year-on-year to €61 million.
Settled transactions rose 22% to 21.9 million in the second quarter, and customers brought in €5.2 billion of net cash in the first half.
flatexDEGIRO, which counted 3 million customers when it launched stock lending in October 2025, had 3.66 million customer accounts at the end of June. It expects net income to rise by 25% to 43% this year, reaching the targets it had set for 2027 a year early.
Shareholders approved a dividend of 30 cents per share in June, about €32 million in total.
The relief does not clear every file with the supervisor. In December 2025, BaFin fined the bank €560,000 over websites that advertised free investing without flagging a processing fee, conduct dating to early 2022.
That fine is the kind of BaFin action FM Intelligence's enforcement tracker follows, alongside fines and warnings from five other regulators.
This article was written by Damian Chmiel at www.financemagnates.com.
Source: Finance Magnates
