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The broker Flatexdegiro, pinned by the German authorities, plunges into the stock market


(BFM Bourse) – Flatexdegiro falls on the stock market as a Bafin audit revealed shortcomings in the management and capital of the German stockbroker. Since the Wirecard scandal, the German supervisor has been much more vigilant.

German stockbroker Flatexdegiro lost nearly 30% on the Frankfurt Stock Exchange on Monday after reporting that an audit by supervisor Bafin found shortcomings in the company’s management and capital.

The action of the online broker in the S-Dax of small and mid-cap companies sank 30% to 7.21 euros, its lowest level since April 2020, after opening down 38%.

Shortcomings identified

Financial supervisor Bafin “identified shortcomings in certain business practices and corporate governance” at the end of an audit report submitted in November, the group said in a press release on Saturday evening.

Bafin demanded that measures be implemented to “ensure a good organization of the company” and “additional capital” while the online broker has experienced strong growth in recent years, without its structures following the same pace. Contacted by AFP, Bafin did not comment.

To meet the supervisor’s requirements, the group’s banking subsidiary, Flatexdegiro Bank, has appointed a new risk manager, among other appointments to strengthen its governance. This banking entity will also be provided with 50 million euros of additional capital.

The broker also indicated that its revenues, drawn from the activity of its customers on the markets, will grow less than expected this year. In question, the global prices, including those of energy, and the geopolitical tensions which have an impact on the activity of the investors.

Increased monitoring from Wirecard

The group only expects a turnover of around 380 million euros this year, against “at least 400 million” previously. The Flatex company acquired its Dutch rival Degiro in 2020 to form a group that now has 2.3 million customers.

Criticized for its shortcomings in the supervision of the payment provider Wirecard, which sank into scandalous bankruptcy, Bafin is now more vigilant towards listed groups.

Its French competitor Bourse Direct does not react to this information and remains stable at 3.32 euros on the Paris Bourse.

(With AFP)

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