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Evening Standard
Evening Standard
Business
Simon Hunt

Dutch fintech Bunq plots return to UK after leaving post-Brexit

One of Europe’s biggest challenger banks is plotting a return to the UK, the Standard can reveal, in a sign that London remains an attractive financial hub for EU investors.

Bunq, which is the second largest neobank in the EU with more than nine million customers and €4.5 billion in deposits, stopped offering new accounts in the UK at the end of 2020, citing Brexit-related red tape difficulties, while its German rival N26 closed all UK accounts and withdrew entirely.

But Amsterdam-based Bunq is now eyeing a comeback and is exploring ways to bring new customers on board. The firm incorporated a new UK subsidiary in late November, Companies House filings show, with a registered office in Regent Street in the capital’s central shopping district.

CEO Ali Niknam told the Standard: “Being both a hotspot for digital nomads and home to many Brits pursuing a digital nomad lifestyle, the UK is a key market for us.

“Plus, it’s amazing to see the UK’s push to embrace fintech. Therefore we are actively looking into new ways to enable UK users to sign up for bunq once again.”

Niknam was no fan of Brexit, but he said differences in bonus cap regulations stopped an exodus of jobs from the City to other European financial hubs after the UK left the EU.

In October, UK regulators announced they would be scrapping the cap altogether following a consultation, opening banker pay up to unlimited salary multiples, in a move aimed at making remuneration more competitive internationally. Under local rules in Holland, bankers cannot receive a bonus greater than 20% of their fixed pay.

Niknam said a bonus cap means “fixed salaries go up and you get less performance for the equal amount of pay [which is] detrimental to consumers”, adding that “the UK is no longer part of the European Union so it needs to do something to stand out.”

Bunq’s move to regain market share in a crowded fintech sector comes amid a turbulent time for Britain’s biggest banks, with both Barclays and Lloyds unveiling thousands of job cuts and dozens of branch closures in the past week. Challenger banks have also suffered, with Metro yesterday revealing it was laying off 800 staff after a crunch refinancing. Earlier this year, investors in fintech giant Revolut slashed the valuation of their stakes by up to 40%.

Bunq has so far staved off wider banking woes, successfully completing a €100 million bridge funding round in July, making it one of the few European fintechs not to see its valuation fall.

Niknam warned that smaller banks were also under pressure amid current economic headwinds and some were in danger of collapsing without regulatory intervention. “If the market is allowed to do its thing, I think the first thing that is going to happen is the poorly-run and too small neobanks are likely to fail, and the mid-size banks are going to fail,” he said.

“The small banks are going to continue because they have the unique bond with their customers, and the big banks are going to continue because they have the advantages of scale. But everything in the middle is going to disappear.” Bunq was founded in 2012 and now operates in 30 European countries. It hit a valuation of $2 billion in a 2021 funding round.

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