N26, the Berlin-based digital bank, reached its first full year of net profitability in 2025, reporting net income of €1.6 million compared with a €42 million net loss in 2024. The profitability milestone resulted from higher revenue, stronger fee income, and tighter cost control, with revenue rising 13% year on year to €501.6 million and gross profit increasing 33% to €350.5 million. The result marks a turning point for one of Europe's best-known challenger banks after a period shaped by regulatory pressure from German financial watchdog BaFin, investor unrest, and leadership change that saw co-founders Valentin Stalf and Maximilian Tayenthal step away from their roles.
N26 Reports €1.6 Million Net Income Driven by Fee Growth and Cost Control
N26's improved performance was driven by higher card transaction volumes, growth in subscriptions, stronger fee income, and lower direct costs. Net fee and commission income rose 21% year on year to €184.2 million, accounting for 53% of gross profit.
Annual transaction volume increased 14% to €170.7 billion, while customer deposits surpassed €10.5 billion. The bank said it had 5.6 million paying customers, placing more emphasis on monetized users rather than headline account growth alone.
Cost control played a major role in the turnaround. Direct costs linked to money transfers, subscriptions, and insurance fell 17% from the previous year. N26 said its headcount remained broadly stable at about 1,500 at the end of 2025 and now stands at around 1,600.
New CEO Mike Dargan described surpassing €500 million in annual revenue as a "landmark milestone" and said it showed the "operating leverage inherent" in N26's platform. CFO Arnd Schwierholz said revenue growth, disciplined cost management, and a diversified earnings profile contributed to the company's first full year of profitability and continued gross profit growth.
BaFin Imposes New Restrictions on N26 Netherlands Mortgage Lending
N26 has had repeated run-ins with German financial watchdog BaFin, including earlier sanctions tied to anti-money laundering controls and restrictions on customer acquisition. In 2021, N26 was fined and placed under a cap on new customer onboarding after concerns over ineffective money laundering controls. The lifting of those restrictions in 2024 helped revive demand and contributed to the bank's path toward profitability.
In December 2025, the regulator ordered N26 to stop new mortgage lending in the Netherlands and imposed additional capital requirements after a special audit found serious deficiencies in risk management, complaint handling, and the organization of the lending business.
Co-Founders Stalf and Tayenthal Step Down as Mike Dargan Takes CEO Role
N26's financial turnaround came alongside a significant management reset. Co-founders Valentin Stalf and Maximilian Tayenthal, who founded the company in 2013 and served as co-CEOs, both stepped away from leadership roles after reported investor dissatisfaction over the handling of regulatory issues.
Stalf left his co-CEO role in 2025, while Tayenthal also stepped back later in the year. Board chairman Marcus Mosen and CFO Arnd Schwierholz served as interim co-CEOs before Mike Dargan took over as CEO in April 2026.
Dargan brings a more traditional banking and infrastructure background, including senior technology and operations roles at UBS and Standard Chartered.
N26 Targets Primary Banking Customers and AI Investment
N26 expects to maintain profitability in 2026 through operating leverage and disciplined investment. Its priorities include strengthening compliance and risk management, increasing customer engagement, investing in existing products, and expanding the use of AI across customer service, personalization, and internal operations.
The bank's focus on primary banking customers will be central. These are users who receive their income into their N26 account and are more likely to use the bank for daily transactions, subscriptions, savings, credit, and long-term financial services.
FAQ
What was N26's net income in 2025?
N26 reported net income of €1.6 million for 2025, compared with a €42 million net loss in 2024. Revenue rose 13% year on year to €501.6 million, while gross profit increased 33% to €350.5 million.
What restrictions did BaFin impose on N26 in December 2025?
In December 2025, BaFin ordered N26 to stop new mortgage lending in the Netherlands and imposed additional capital requirements after a special audit found serious deficiencies in risk management, complaint handling, and the organization of the lending business.
When did Mike Dargan become CEO of N26?
Mike Dargan took over as CEO in April 2026, following the departure of co-founders Valentin Stalf and Maximilian Tayenthal from their co-CEO roles in 2025.
