This week’s FS news 17.02.2020

N26 blames Brexit for UK exit

N26 blames Brexit for UK exit

German challenger bank N26 has blamed Brexit for its decision to leave the UK, stating it can no longer operate in the country with its European banking licence.

In a statement on its website, the bank revealed it will close all of its UK customer accounts by 15 April. While N26 has not officially confirmed the number of accounts involved in the closure, it is believed to be around 200,000.

Thomas Grosse, chief banking officer at N26, told Finextra: “While we fully respect the decision that has been taken [Brexit], it means that N26 will in due course be unable to service our customers in the UK and will have to leave the market.”

Until now, the challenger, which has 5 million customers in the EU, has been relying on passporting rights that allowed it to use its German licence to operate in the UK.

According to The Guardian, N26 originally planned to take advantage of the British regulator’s temporary permissions regime to continue operating in the country after Brexit.

However, N26 has not applied for a UK banking licence, despite having entered the UK market after the Brexit referendum.

Upon the bank’s UK launch 18 months ago, N26’s CEO Valentin Stalf said the move was a “no-brainer… independent of Brexit”. And as recently as October 2019, N26 was publishing blog posts assuring customers it would continue to service the UK after Brexit. These posts have since been deleted.

Because of this, many have questioned if Brexit is the sole reason for N26’s impending departure.

It has been suggested that N26 was struggling to compete with other UK neobanks like Monzo and Starling. In December 2019, N26 ranked 19th on the UK challenger bank list for most active users.

N26 has denied the move was due to poor performance or capital requirements needed to obtain a UK banking licence, claiming instead that it was unviable due to the cost and time constraints needed to obtain one before the end of the year.

N26 customers have been advised to empty their bank accounts. They have also been told to move any recurring payments to another bank.

On 15 April, the bank’s UK customers will no longer be able to access their accounts. Their cards will be deactivated and deposits will bounce.

• German digital bank N26 pulls out of UK, blaming Brexit
• Blaming Brexit, N26 quits the UK
• German challenger N26 pulls out of UK ‘over Brexit’
• N26 exits UK market following Brexit
• German challenger bank N26 will close 200,000 UK current accounts in April ‘due to Brexit’ — despite launching two years after the EU referendum
• What will happen to my UK N26 account?

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