German regulator, stung by past failings, extends oversight of N26 - sources

FRANKFURT/BERLIN, Jan 26 (Reuters) - Germany’s financial regulator BaFin is extending its oversight of online bank N26 to cover the whole company, two people with knowledge of the matter said, as the watchdog tightens controls following the collapse of payments firm Wirecard.

There is no indication of any malfeasance at N26, and the stricter oversight is a precaution, one of the sources said, speaking on condition of anonymity as the information is not public.

N26 declined to comment on its relationship with regulators, but said dialogue was always close and cooperative. BaFin declined to comment.

N26 is one of several companies that BaFin is looking at more closely as it seeks to learn lessons from the Wirecard debacle, which led to widespread criticism of the regulator for failing to spot Germany’s biggest post-war corporate fraud.

BaFin will now treat N26 as a financial holding company, giving it oversight of the entire company, the people said.

Previously, the watchdog oversaw only N26’s banking arm. That mirrored the situation with Wirecard, as BaFin only oversaw Wirecard Bank and not the whole business.

In 2019, BaFin ordered N26 to step up controls to ensure it is better protected against money laundering.

N26 was founded in 2013. Its investors include a Singaporean sovereign wealth fund, China’s Tencent, and Germany’s Allianz . (Reporting by Patricia Uhlig, Nadine Schimroszik and Tom Sims. Editing by Mark Potter)