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flatexDEGIRO: Europe's Discount Brokerage Disruptor
I. Introduction: The Digital Battleground for European Wealth
On a gray December morning in Frankfurt's financial district, a seismic shift in European finance was quietly taking form. Inside the gleaming Omniturm tower, the offices of flatexDEGIRO—Europe's largest online broker—hummed with the energy of a company that had weathered regulatory storms, leadership upheaval, and a post-pandemic trading collapse to emerge stronger than ever.
Today, flatexDEGIRO stands as the leading and fastest growing European online broker with over 2.5 million customers in 16 countries, processing over 67 million transactions a year with more than €300 billion in transaction volume. The numbers tell a story of relentless growth, but behind them lies a more compelling narrative—one of a German media entrepreneur's side project that evolved into a continent-spanning financial infrastructure.
The share price has moved by +120.14% over the past 365 days, an astonishing turnaround for a company that saw its stock crater during the 2022-2023 regulatory crisis. What's driving this resurgence? And can the company sustain its momentum against well-funded competitors like Trade Republic and the looming threat of Robinhood's European expansion?
This is a story of disruption and consolidation, of technology and regulation, and ultimately of a bet that Europeans—long underserved by traditional banks charging premium fees—would embrace a new way to invest. It's also a cautionary tale about the perils of growing too fast and the importance of regulatory compliance in an industry built on trust.
Episode Themes: The democratization of European investing, M&A as a growth strategy, the delicate dance with regulators, and the existential battle for the European retail investor's attention.
II. Origins: The Bernd Förtsch Story & German Fintech Roots (1990-2006)
Picture Kulmbach in the early 1990s—a small Bavarian town better known for its breweries than its financial acumen. Here, an aspiring entrepreneur named Bernd Förtsch was about to begin a journey that would reshape European retail investing.
Bernd Förtsch completed his training as a tax clerk at a tax law firm in Kulmbach and then successfully passed the exam to become a state-certified accountant. He then worked as head of payroll and financial accounting and later as managing director at a company in the automotive industry. It was an unlikely background for someone who would become one of Germany's most influential financial media personalities.
In 1990, he founded Börsenbuch-Verlag Förtsch KG, which specialized in the distribution of financial publications, in particular books. What started as a small publishing venture would prove transformational. In the 1989-founded Börsenbuchverlag, the predecessor of Börsenmedien AG, Bernd Förtsch began with the translation and distribution of stock market books by international bestselling authors, including Peter Lynch and André Kostolany.
The timing was impeccable. Germany was experiencing a retail investing renaissance. The fall of the Berlin Wall, the privatization of major state enterprises like Deutsche Telekom, and the emergence of the Neuer Markt—Germany's answer to the NASDAQ—had created a new generation of individual investors hungry for information.
In 1998, he founded Börsenmedien Aktiengesellschaft in Kulmbach, which is now the leading specialist publisher of financial information in the German-speaking world, including through the acquisition of Münchener Finanzen Verlag GmbH in 2021, with the authorized journals for obligatory announcements "Der Aktionär", "BÖRSE ONLINE", "€uro am Sonntag", the monthly magazine "€uro" and various stock market newsletters.
The dot-com era provided both opportunity and cautionary lessons. Germany's Neuer Markt experienced extraordinary growth between 1997 and 2000, with retail participation reaching unprecedented levels. Förtsch, through his media empire, had a front-row seat to this transformation—and observed how poorly traditional German banks were serving the new investor class.
Bernd Förtsch founded PRE.IPO AG in 1999, the predecessor of today's flatexDEGIRO AG. The company name itself signaled Förtsch's initial ambitions—providing retail investors access to pre-IPO opportunities typically reserved for institutional players.
The Kulmbach connection matters. Unlike Frankfurt's established banking houses, this was fintech born in Bavaria's periphery—leaner, hungrier, and unburdened by legacy thinking. Förtsch understood something that traditional banks didn't: retail investors weren't just seeking lower fees, they were seeking respect and access.
Bernd Förtsch is the founder and majority owner of online broker flatex, which launched in spring 2006 under the shell of PRE.IPO AG founded in 1999. The company, headquartered in Kulmbach, has been listed on the Frankfurt Stock Exchange's Open Market since June 2009.
For investors, the Förtsch origin story carries important implications. Here was a media entrepreneur who understood investor psychology, had built trusted brands in financial publishing, and possessed the entrepreneurial drive to challenge established players. Yet this same media background would later create tensions when the company grew beyond its scrappy startup phase.
III. The flatex Model: Disrupting German Brokerage (2006-2015)
In 2006, German retail investors faced an absurd reality. Buying €5,000 worth of stocks through a traditional bank could cost €50 to €100 in commissions—sometimes more. Banks defended these fees as necessary for "advice" that most self-directed investors neither wanted nor received.
In 2006, it entered the market with the online broker flatex and has since developed into the European market leader in online brokerage, not least through the IPO in summer 2009, the acquisition of the former cooperation partners XCOM AG and biw Bank fĂĽr Investments und Wertpapiere AG and the acquisition of the Dutch online broker DEGIRO in 2020.
The term "flatex" is a so-called portmanteau word and is derived from the two English words flat for 'all-inclusive' and execution for 'execution/processing'. The name encapsulated the value proposition: a simple, flat fee regardless of order size. While traditional banks charged percentage-based commissions, flatex offered execution at a fixed rate—revolutionary simplicity in a market notorious for fee opacity.
The business model was elegantly straightforward: strip out advisory services that self-directed investors didn't need, leverage technology to automate what banks staffed with expensive human beings, and pass the savings to customers. This wasn't charity—it was calculated market disruption.
The Kulmbacher was a co-founder of the stock market media AG and publisher of the market letter Der Aktionär Bernd Förtsch. In the summer of 2009, the IPO took place as Flatex AG.
The IPO timing was counterintuitive. Coming just months after the Lehman Brothers collapse had devastated global markets, conventional wisdom suggested retail investors would flee equities for a generation. But flatex understood something deeper: those who continued investing would be more fee-conscious than ever. Crisis breeds price sensitivity.
Technology as Core Competency
What distinguished flatex from mere discount competitors was its approach to technology. Rather than licensing systems from third-party providers—the approach most banks took—flatex pursued vertical integration.
The acquisition of the former cooperation partners XCOM AG and biw Bank fĂĽr Investments und Wertpapiere AG proved crucial. XCOM, a software and systems house that had been operating since 1988, provided the technological backbone for flatex's ambitions.
The XCOM acquisition in March 2015, followed by its merger with Flatex AG on August 31, 2017, was more than a technology play—it brought something equally valuable: a banking license. Through this acquisition, what would become flatexDEGIRO Bank AG joined the group, providing the regulatory foundation for future expansion.
This verticalization strategy—owning the technology stack rather than renting it—would prove decisive. When competitors faced integration headaches with third-party systems, flatex could iterate rapidly. When regulatory requirements changed, flatex could adapt its own code rather than waiting for vendor updates.
The B2B Opportunity
Flatex also recognized an opportunity hidden from retail-focused competitors: business-to-business services. The same infrastructure powering flatex's consumer platform could serve other financial institutions needing transaction processing, custody, or white-label brokerage solutions.
This B2B division—often overlooked in discussions of flatex—provided revenue diversification and, crucially, additional scale that improved unit economics across the entire business. A transaction processed for a B2B partner contributed to the same fixed-cost infrastructure serving retail customers.
By 2015 it gelangte with over 200,000 customers into the field of leading online brokers in Germany.
For investors analyzing flatex's early success, the strategic clarity stands out. This wasn't a company trying to be everything to everyone—it was laser-focused on self-directed investors who prioritized price and execution reliability over hand-holding. The technology ownership and banking license provided structural advantages that would compound over time.
IV. The Rise of DEGIRO: The Dutch Disruptor (2008-2019)
While flatex was building its German fortress, 600 kilometers to the northwest, another group of financial professionals was plotting their own revolution.
DEGIRO was founded in 2008 by a group of five former employees of Binck Bank to service the professional market. The founders—including Gijs Nagel, Jasper Anderluh, Niels Klok, and Stef Keetman—had grown frustrated watching their employer charge retail investors fees that bore no relationship to actual execution costs.
The founders aimed to create a low-cost online platform for institutional and professional clients, focusing on direct market access and streamlined execution rather than retail investors. This origin stemmed from dissatisfaction with higher fees and limited access at established brokers like BinckBank, prompting a model emphasizing technology-driven efficiency for high-volume traders.
The timing seemed terrible. Launching a financial services firm in 2008—as Lehman Brothers collapsed and global markets cratered—appeared suicidal. But the founders recognized an opportunity within the chaos: the financial crisis would fundamentally alter investor behavior, creating demand for lower-cost alternatives.
From 2009 to 2012, DEGIRO operated exclusively in the institutional segment, serving professional clients without public retail offerings, which allowed for platform refinement amid the post-2008 financial crisis environment of heightened regulatory scrutiny and market volatility.
This institutional incubation period proved invaluable. By building first for professional traders with demanding requirements, DEGIRO developed a platform with enterprise-grade reliability. When the company finally turned to retail investors, it would offer systems battle-tested by the most sophisticated users.
The 2013 Retail Launch
On 23 September 2013, DEGIRO launched its services for retail clients in the Netherlands.
When DEGIRO launched in 2013, it wasn't hard for the new brokerage to gain market share from incumbent Dutch and European brokers as "people were fed up with paying high fees and the industry was pushing them away," as DEGIRO co-founder Gijs Nagel put it in a 2017 interview.
The firm distinguishes itself with exceptionally low commissions—often as little as €1 per trade for certain instruments—and broad market access, attracting millions of users seeking affordable entry into investing without the overhead of traditional brokers.
DEGIRO's value proposition was even more aggressive than flatex's. While flatex offered flat fees, DEGIRO offered fees so low they seemed almost symbolic—€1 or €2 per trade for many instruments. European investors, long accustomed to paying €10-€40 per transaction, discovered they could execute the same trades for pocket change.
Pan-European Expansion
What truly set DEGIRO apart was its European ambition. Rather than dominating a single national market, the founders envisioned a continent-spanning platform. By 2015, the platform expanded to various other European countries.
The expansion playbook was remarkably efficient. DEGIRO's technology-first approach meant adding new markets required regulatory compliance and localization rather than building new infrastructure. One platform, eighteen countries, millions of potential customers.
DEGIRO is now active across 18 countries and is the fastest growing broker in Europe. DEGIRO enables its clients to invest worldwide for extremely low fees, which remain on average 80% lower than current European retail brokers.
Platform Vulnerabilities
But growth came at a cost. DEGIRO's platform, optimized for low costs, initially struggled with reliability.
In December 2021, the Dutch national bank raised concerns about the technical quality of DEGIRO's IT infrastructure. It had ruled that DEGIRO was insufficiently protected against crashes and hacks.
On multiple occasions, Reddit users have reported being unable to place orders with DEGIRO due to downtime.
The platform reliability issues highlighted a fundamental tension in discount brokerage: how do you offer rock-bottom fees while maintaining enterprise-grade infrastructure? DEGIRO had optimized ruthlessly for the former, sometimes at the expense of the latter.
The Strategic Vulnerability
DEGIRO's rapid growth concealed a structural weakness that would ultimately shape its future: it lacked a banking license.
Currently, DeGiro acts as a Dutch investment firm and, unlike flatex, which has a German full banking license, is unable to offer full financial services directly itself.
Without a banking license, DEGIRO depended on third-party banks for custody and cash management. This created operational complexity, limited product offerings, and meant customer deposits lacked direct deposit insurance protection. As DEGIRO scaled, this structural gap became increasingly problematic.
For investors analyzing DEGIRO's pre-acquisition story, the lessons are instructive: aggressive pricing and rapid expansion can capture enormous market share, but infrastructure and regulatory foundations eventually matter. DEGIRO had built something remarkable but increasingly needed what flatex possessed—a full banking license and owned technology stack.
V. The Transformational Merger: flatex Acquires DEGIRO (2019-2021)
In the world of European fintech, December 2019 marked a watershed moment. Two discount brokers, each having disrupted their respective markets, would combine to create something neither could achieve alone.
On December 13, 2019, flatex acquired 9.4% of DEGIRO for EUR 23.6 million in cash with the acquisition of the remaining 90.6% being subject to the approval of the responsible authorities.
This acquisition, valued at EUR 250 million, is expected to expand flatex's reach to over 15 European countries, serving more than one million customers and handling over 35 million transactions annually.
The strategic logic was compelling. Flatex had built a robust German platform with a banking license and owned technology stack but limited geographic reach. DEGIRO had achieved pan-European scale and brand recognition but lacked regulatory infrastructure and full banking capabilities. Together, they could create Europe's first true continental brokerage platform.
The Deal Structure
To finance the purchase price for 100% of the shares in DeGiro, flatex AG is carrying out a capital increase against contribution in kind at completion. In this context, up to 7.5 million new flatex shares will be issued to the current DeGiro shareholders precluding the subscription rights of existing shareholders. In addition, flatex will pay in total up to EUR 60 million in cash.
The structure was elegant: DEGIRO shareholders would become flatex shareholders, aligning incentives for post-merger success. The relatively modest cash component preserved flatex's balance sheet while the share issuance demonstrated confidence in the combined entity's future.
Then came COVID-19.
Pandemic Acceleration
The merger, announced in December 2019, closed in July 2020—into a completely transformed world. What could have been a challenging integration environment became an extraordinary growth accelerator.
flatex and DEGIRO gained more than 170,000 new customers on a pro forma basis in Q1 2020. 35,000 new customers (+218% compared to Q1/2019) opted for flatex and more than 135,000 customers opted for DEGIRO (+385% compared to Q1/2019).
As then-CEO Frank Niehage noted during the acquisition: "When we signed the transaction, DEGIRO had less than 500k customers. We are now closing the transaction with 250k additional new clients at no additional costs and are becoming the first and largest pan-European online broker."
The transaction to acquire Degiro was completed at the end of July 2020. With the takeover, the company was able to increase the number of customers to over one million. With the takeover, Degiro customers benefited from the deposit insurance of the former Flatex Bank and its banking license.
The Integration Thesis
CFO Muhamad Chahrour stated: "We are very confident on the EUR 30 million in annual synergies, first synergies will be leveraged in the second half of 2020."
The synergy thesis centered on three pillars:
- Regulatory Simplification: Migrating DEGIRO onto flatex's banking license would eliminate complex multi-jurisdiction compliance requirements
- Technology Consolidation: Running both brands on unified infrastructure would reduce operating costs
- Cross-Selling Opportunities: Introducing flatex's banking products to DEGIRO's customer base (and vice versa)
Nine months after closing the acquisition, DEGIRO has become a branch of flatexDEGIRO Bank under the supervision of the German Federal Financial Supervisory Authority (BaFin) as a result of the merger.
At the Annual General Meeting in October 2020, Flatex AG was renamed Flatexdegiro AG (own spelling flatexDEGIRO). The new name signaled commitment to both brands—flatex for the German and Austrian markets, DEGIRO for the pan-European expansion.
For investors, the merger represented a masterclass in strategic M&A. Rather than paying premium prices for growth, flatex acquired a complementary business at reasonable valuations and integrated it onto existing infrastructure. The banking license—something DEGIRO critically lacked—instantly became available to millions of new customers. Within eighteen months, the combined entity had transformed from two regional players into Europe's dominant discount brokerage platform.
VI. The COVID Boom: Riding the Retail Trading Wave (2020-2021)
If the flatex-DEGIRO merger was a strategic masterstroke, the COVID-19 pandemic was an unprecedented catalyst. What management had projected to achieve over years compressed into months.
The perfect storm assembled: millions confined to homes, government stimulus checks seeking deployment, unprecedented market volatility creating trading opportunities, and a new generation discovering investing through social media. In this environment, discount brokers weren't just beneficiaries—they were essential infrastructure for a retail trading revolution.
The Flatexdegiro share price captured this transformation. From around €6 at the beginning of 2020, it rocketed to nearly €30 by mid-2021—a 5x appreciation that exceeded even management's most optimistic projections.
During the first six months of 2021, flatexDEGIRO won over 500,000 new customers, raising its European customer base to 1.75 million at the end of June 2021 (December 2020: 1.25 million). Customer addition was thus more than 2.5 times the previous year's period, which was already exceptional due to COVID-19.
The numbers were staggering: Group EBITDA increased from approximately €30 million in 2017 to approximately €110 million in 2021. At the end of 2021, the company had around 2 million customers and executed 91 million securities transactions.
The Meme Stock Moment
While American investors obsessed over GameStop and AMC, European retail traders joined the phenomenon through platforms like DEGIRO. Suddenly, brokerage wasn't just financial infrastructure—it was cultural moment. Social media influencers discussed their DEGIRO portfolios. Beginner investor forums debated flatex versus competitors. Retail trading had entered the mainstream conversation.
This cultural shift proved double-edged. The immediate effect was extraordinary customer acquisition at minimal marketing cost—word-of-mouth and social media did the work that advertising couldn't. But it also attracted a customer cohort whose engagement depended on market excitement rather than long-term investing conviction.
Setting Ambitious Targets
Riding the momentum, management set aggressive targets: until 2025 at the latest, flatexDEGIRO aimed to win over 3 million customers and execute at least 100 million transactions per year. At the time, these targets seemed conservative extrapolations of existing trajectories.
For investors analyzing the COVID boom period, the critical question was always sustainability. How much growth represented structural shift toward self-directed investing versus temporary pandemic-driven behavior? How would the customer base perform when market conditions normalized?
The answers would come sooner than anyone expected—and they would be painful.
VII. The Crash: Regulatory Crisis & Leadership Turmoil (2022-2024)
The hangover arrived with brutal speed. What had been European fintech's greatest success story became a cautionary tale about the perils of hypergrowth and regulatory neglect.
The war in Ukraine, high inflation and increased interest rates have put an abrupt end to the steep growth of online broker Flatexdegiro 2022. After the record year 2021 investors traded significantly fewer securities, the number of transactions collapsed by more than a quarter.
The stock price collapse mirrored the operational deterioration. From nearly €30 at its peak, flatexDEGIRO shares fell relentlessly. By Christmas 2022, the share price was back at pre-pandemic levels—erasing billions in market capitalization.
The BaFin Bombshell
While market conditions explained some of the pain, the company's self-inflicted wounds proved more damaging.
BaFin issued a final and binding administrative order on 7 February 2023 imposing a fine in the amount of €1,050,000 on flatexDEGIRO Bank AG because the institution had violated banking supervisory regulations.
The €1.05 million fine was almost irrelevant financially. What mattered was what it signified: BaFin had found systematic deficiencies in an institution that had grown from "small and non-complex" to pan-European leader in just a few years.
flatexDEGIRO Bank AG must ensure that it has a proper business organisation in place in the areas of risk management and money laundering prevention. flatexDEGIRO Bank AG must now remedy serious shortcomings in its internal controls, its supervisory reporting system and in the area of money laundering prevention.
Furthermore, flatexDEGIRO Bank AG and the flatexDEGIRO AG financial holding group were issued an order on 8 September 2022 requiring them to hold additional own funds.
When flatexDEGIRO announced some of BaFin's findings in December 2022, the company's stock price lost -33% of its value. BaFin has imposed various measures on the broker including a fine of €1.05 million and mandated an increase in the broker's capital requirements, of €50.0 million.
The regulatory findings painted a troubling picture. The company had grown so rapidly that its internal controls hadn't kept pace. Risk management systems designed for a smaller operation couldn't handle the scale. Money laundering prevention procedures—critical for any financial institution—had gaps.
According to the neobroker, the number of transactions processed increased almost sevenfold from 12 million to 91 million between 2019 and 2021. During this time, customer assets under custody tripled to around €42 billion. Now, Flatexdegiro is no longer a "small and non-complex" institution in the eyes of Bafin, which leads to increased regulatory requirements for the group.
Dutch Regulatory Issues
The German regulatory problems compounded earlier concerns raised by Dutch authorities regarding DEGIRO specifically.
In December 2021, the Dutch national bank raised concerns about the technical quality of DEGIRO's IT infrastructure. It had ruled that DEGIRO was insufficiently protected against crashes and hacks.
The securities lending issues at DEGIRO also drew regulatory attention. Risk mitigation strategies were temporarily not applicable due to "procedural weaknesses." The company stated it was "pressing ahead at full speed" with remedying these deficiencies.
Leadership Chaos
As regulatory pressure intensified, cracks appeared in the leadership team. In a rare display of public disagreement for German corporate culture, major shareholder Bernd Förtsch publicly criticized management.
He told "Wirtschaftswoche" that the fall in the share price and the low market value of around one billion euros was the result of "operational, strategic and also supervisory board mistakes". In the interview, Fortsch criticized the lack of innovation at Flatexdegiro, an understanding of the market and "products that are super attractive for customers". For example, Flatex's previously simple fee structures are now just as opaque as those of its competitors. The company overslept the boom in cryptocurrencies such as Bitcoin.
Competitors Swissquote and Trade Republic are worth around four times as much on the stock exchange as Flatexdegiro.
The criticism stung because it contained uncomfortable truths. While competitors like Trade Republic had launched crypto trading and expanded product offerings, flatexDEGIRO had remained focused on traditional securities. The company that once defined innovation had become a laggard.
The online broker Flatexdegiro needs a new boss after the turbulence of recent years. CEO Frank Niehage is stepping down on April 30 - around a month after major shareholder Bernd Fortsch publicly settled accounts with the manager's work. Flatexdegiro justified his departure with "differing views on strategic development."
The departure followed sharp criticism from the company's founder and major shareholder, Bernd Foertsch, who told a business magazine last month he would vote against Niehage and the company's chair at an upcoming shareholder meeting due to strategic mistakes, like "sleeping through a cryptocurrency boom".
The shareholders' meeting became a referendum on management. The shareholders refused to discharge the former CEO Frank Niehage, the former Deputy CEO Muhamad Chahrour, and the Chairman of the Supervisory Board Martin Korbmacher. The shareholders elected Förtsch as a new member of the Supervisory Board.
For investors, the 2022-2024 period offered brutal lessons. Hypergrowth without proportionate investment in compliance infrastructure creates regulatory risk. Customer acquisition means nothing if operational execution fails. And founder-management conflicts, when they surface publicly, typically signal deeper organizational dysfunction.
VIII. The Turnaround: New Leadership & Strategic Reset (2024-Present)
From the ashes of leadership turmoil and regulatory crisis, flatexDEGIRO has orchestrated a remarkable recovery under new leadership.
The Company's Supervisory Board appointed Oliver Behrens (60) as Chief Executive Officer (CEO) of flatexDEGIRO AG, effective from October 1, 2024, for a duration of three years.
Oliver Behrens brings 40 years of experience in the European financial industry with a strong link to brokerage and an outstanding network in international finance and politics. From 2015 to June 2024, Oliver Behrens lately was CEO of Morgan Stanley Europe Holding SE, Morgan Stanley Europe SE and Morgan Stanley Bank AG, Frankfurt am Main, as well as Member of the Board of Morgan Stanley International Limited, London.
Prior to this, Behrens was a Member of the Board at Deka-Bank from 2005 to 2014, where he held the position of Deputy CEO. His earlier career includes roles at DWS Group, DWS, and Deutsche Asset Management, where he was the Spokesman of the Management Board of Deutsche Asset Management Investment GmbH.
The appointment represented a deliberate shift in tone. Behrens wasn't a startup founder or fintech evangelist—he was an establishment banker with decades of experience navigating complex regulatory environments. His network in German and European financial regulation would prove invaluable for a company under BaFin scrutiny.
"The European online brokerage business is still in its early innings, holding enormous potential for growth and value enhancement," Behrens commented. "Together with flatexDEGIRO's strong leadership team, I am very much looking forward to leading the company into the next phase of its evolution, further enhancing the investment experience for millions of clients across 16 countries while firmly establishing flatexDEGIRO as the driving force in the European online brokerage market."
Regulatory Remediation
The turnaround story begins with regulatory cleanup. Around 70 percent of the December 2022 BaFin special audit issues have been resolved, with the company working systematically through remaining requirements. The BaFin-appointed special commissioner continues monitoring implementation, but the trajectory is clearly positive.
flatexDEGIRO achieved record result and aims for further significant Revenue and earnings growth by 2027. Net Income increases by 55% to EUR 112 m - guidance exceeded. Commission Income up 20% to EUR 282 m, Interest Income up 32% to EUR 180 m. 421,000 new customer accounts lead to customer base of 3.1 m customers - net cash inflows of EUR 6.6 bn. Strategic priorities focus on customer growth and operational efficiency.
Financial Performance Rebound
In 2024, flatexDEGIRO AG's revenue was €469.32 million, an increase of 23.42% compared to the previous year's €380.26 million. Earnings were €111.54 million, an increase of 55.21%.
The 2025 performance has exceeded even these improved 2024 results.
flatexDEGIRO delivered exceptional half-year results, with revenues reaching €278 million, representing a 15% increase compared to H1 2024. This growth translated into even stronger bottom-line performance, with EBITDA rising 24% to €106 million and net income surging 34% to €82 million year-over-year.
Despite growing its business, flatexDEGIRO has reduced its cost-income ratio to below 50% in H1 2025, a significant improvement from 70% in H1 2023.
Strategic Initiatives
Under Behrens, flatexDEGIRO has finally addressed the innovation gaps that Förtsch criticized.
The company successfully launched crypto trading at DEGIRO Germany in Q2 2025, generating approximately €175 million in trading volume in Germany alone.
The company's securities lending initiative remains on track for launch in key markets, including the Netherlands and Spain, in early Q4 2025.
Buoyed by these results, flatexDEGIRO is raising its annual targets for the second time in 2025: revenue is now expected to be between €530 million and €550 million, with net income between €150 million and €160 million.
The 2027 vision is ambitious: These growth measures are expected to increase Revenues by around a third to around EUR 650 m and Net Income by around 75% to around EUR 200 m by 2027.
Share Price Recovery
Shares in flatexDEGIRO last closed at €31.70 and the price had moved by +120.14% over the past 365 days.
FTK reached its all-time high on Oct 28, 2025 with the price of €34.56.
The recovery validates the turnaround thesis. With regulatory issues largely resolved, new leadership providing credibility, and growth initiatives finally addressing product gaps, flatexDEGIRO has reclaimed its position as Europe's leading online broker.
For investors, the turnaround demonstrates that even severely damaged franchises can recover when management takes accountability, addresses root causes, and executes systematic improvement. The question now becomes whether this recovery is complete or just beginning.
IX. Competitive Landscape: The Battle for European Retail Investors
flatexDEGIRO doesn't compete in a vacuum. The European online brokerage market has attracted well-funded competitors, each with distinct strategies and advantages.
Trade Republic: The $5.3 Billion Challenger
Trade Republic has raised $1.25B in funding from investors like Accel, Sequoia Capital and Founders Fund, with a current valuation of $5.3B.
European digital broker Trade Republic reported its assets under management have exceeded €100 billion as its customer base doubled to 8 million in the past year.
Trade Republic's growth is staggering. A year ago, the company was celebrating the 4 million customer mark and €30 billion under management. Doubling both customers and assets in twelve months suggests momentum flatexDEGIRO cannot ignore.
Unlike flatexDEGIRO's dual-brand approach (flatex in Germany/Austria, DEGIRO pan-European), Trade Republic operates under a single unified brand. The firm has yet to announce plans for an IPO, though it has secured a full European banking license, potentially setting the stage for future expansions.
The PFOF Question
A critical competitive dynamic involves payment for order flow (PFOF)—the practice of receiving payments from market makers for routing customer orders.
Because of the controversy, the European Union has decided to ban payment for order flow from 2026 onwards. Until then, member states can allow PFOF but only for clients in that member state.
Because of this, the EU decided to ban it from 2026, which will impact brokers like DEGIRO and Trade Republic.
In June 2021, Dutch state media reported that DEGIRO would start selling customer orders to Tradegate. Dutch regulators did not approve this practice, known as payment for order flow. However, following DEGIRO's takeover by German company Flatex, the money of its Dutch customers is now stored on a German bank account. By consequence, DEGIRO's business practices largely fall under German jurisdiction, where the practice is legal.
The 2026 PFOF ban will force business model adjustments across the industry. Brokers relying heavily on PFOF revenue must either raise explicit fees, find alternative revenue streams, or accept lower margins. FlatexDEGIRO's diversified revenue model—including interest income and B2B services—provides some insulation.
Robinhood's European Ambitions
The American giant that sparked the commission-free trading revolution has finally arrived in Europe. Robinhood first introduced Robinhood Crypto in late 2023, then spent 2024 onboarding 24 countries. The June 2025 stock-token release extended coverage to all 27 EU members plus Iceland, Liechtenstein, Norway and the UK.
Robinhood brings brand recognition, enormous resources, and battle-tested technology optimized for mobile-first users. Its European entry represents an existential competitive threat for all established players.
XTB, Trading 212, and Revolut
European investors already enjoy low-fee trading at XTB, Trading 212, Trade Republic and Revolut. Each presents competitive challenges:
- XTB: Strong derivatives offering and educational content
- Trading 212: Commission-free model with expanding product range
- Revolut: Massive existing customer base through banking app
For investors evaluating flatexDEGIRO's competitive position, several factors stand out:
- Scale Advantages: With 3+ million customers and established infrastructure, flatexDEGIRO enjoys cost-per-transaction advantages newer entrants cannot match
- Banking License: Full banking authorization provides regulatory and product flexibility competitors lack
- Technology Ownership: Proprietary systems enable faster iteration than competitors dependent on third-party infrastructure
- Dual Brand Strategy: flatex and DEGIRO serve different customer segments, expanding addressable market
X. Business Model Deep Dive
Understanding flatexDEGIRO requires examining how the company actually makes money—and where the risks lie.
Revenue Composition
The company generates revenue through three primary streams:
- Commission Income: Transaction fees charged on customer trades
- Interest Income: Earned on margin loans and customer cash deposits
- Other Operating Income: B2B services, platform fees, and miscellaneous revenue
The balance between these streams has shifted meaningfully:
Commission income declined by 14% in 2023 to €235 million as trading activity normalized post-pandemic. However, interest income grew 91% to €136 million year-on-year, benefiting from higher interest rates on margin loans and customer deposits.
In Q2 2025, commission income contributed €85 million, while interest income added €43 million. The company has also improved its monetization, with commissions per transaction reaching €4.72 in Q2 2025, compared to €4.33 in Q2 2024.
The Interest Rate Sensitivity
flatexDEGIRO has maintained its strategy to not pay interest on cash deposits. This creates significant interest income when rates are elevated—customer cash deposits held with central banks earn yield that flows directly to the company.
Due to the large proportion of customer deposits held directly with the German Federal Bank, flatexDEGIRO benefits directly from the positive interest rate environment.
However, this creates interest rate sensitivity. As ECB rates decline, interest income falls. Management guides that higher commission income from brokerage will offset declining interest income, but the transition introduces execution risk.
Customer Economics
flatexDEGIRO reduced its Marketing Expenses by 7% to €32 m (2023: €34 m), leading to a decline in the average customer acquisition cost to EUR 75 per customer (2023: EUR 100).
Customer acquisition costs of €75 compare favorably to lifetime value projections. With annual retention rates exceeding 99% and average revenue per user meaningful, unit economics appear healthy.
The Dual Brand Strategy
flatexDEGIRO AG, together with its subsidiaries, provides online brokerage and IT solutions in the areas of finance and financial technology services in Europe. The company operates through two segments: flatex and DEGIRO. The company offers online brokerage services, including execution-only securities transactions under the flatex brand; shares, bonds, futures, options, stock-exchange-traded products, and stock-exchange-traded funds under the DEGIRO brand name.
The dual-brand approach allows market-specific positioning while sharing underlying infrastructure. flatex targets the German/Austrian market with a full-service positioning while DEGIRO competes on price across Europe.
Technology as Competitive Moat
flatexDEGIRO uses proprietary technology with very high availability along the entire value chain and thus sets standards in platform and service quality.
The company develops, produces, distributes, and maintains software, hardware, and information technology infrastructure. Further, it offers flatex Core Banking System, a platform for the technological mapping of business processes for bank operations.
Technology ownership enables both cost efficiency and product differentiation. The flatex Core Banking System isn't just internal infrastructure—it's a B2B product generating additional revenue while improving scale economics.
XI. Investment Framework: Porter's 5 Forces & Hamilton's 7 Powers
Porter's Five Forces Analysis
1. Threat of New Entrants: MODERATE-HIGH
Low barriers to entry in fintech mean new competitors can launch quickly with modern technology stacks. However, several factors provide incumbent protection: - Banking licenses create meaningful regulatory moats (flatexDEGIRO has one; many competitors don't) - Scale economics improve with transaction volume - Trust in regulated institutions matters—especially post-crypto-winter
The emergence of neobanks with brokerage features and crypto platforms expanding into traditional securities demonstrates ongoing entry threats.
2. Bargaining Power of Suppliers: LOW
Exchange connectivity is commoditized. flatexDEGIRO's proprietary technology stack reduces dependence on external software suppliers. Market makers compete for order flow, giving brokers leverage in execution partnerships.
3. Bargaining Power of Buyers: HIGH
This is flatexDEGIRO's greatest competitive challenge. Retail investors face near-zero switching costs—opening an account with a competitor takes minutes. Price transparency makes comparison easy. Customer loyalty is transactional, not emotional. The only switching friction comes from tax implications of transferring positions.
4. Threat of Substitutes: MODERATE
Traditional banks still hold the majority of European household wealth. For many potential customers, the substitute isn't another broker—it's not investing at all, or leaving money in bank deposits. Robo-advisors and passive ETF platforms represent direct substitutes for hands-off investors.
5. Industry Rivalry: HIGH
Competition is intense and likely to intensify. Trade Republic's war chest, Robinhood's European expansion, and existing players like XTB and Trading 212 all compete for the same customer base. The PFOF ban will force business model adjustments industry-wide, potentially triggering price wars.
Hamilton's 7 Powers Framework
1. Scale Economies: PRESENT
flatexDEGIRO's cost per transaction declines as volume increases. Fixed technology infrastructure, regulatory compliance costs, and banking operations spread across more customers. With 3+ million customers and 67+ million annual transactions, scale advantages are meaningful.
2. Network Effects: WEAK
Unlike social platforms, brokerage lacks strong direct network effects. However, weak network effects exist through community features, copy trading (if implemented), and market liquidity on some instruments.
3. Counter-Positioning: PARTIALLY PRESENT
Traditional banks face structural challenges matching flatexDEGIRO's fee levels without cannibalizing existing revenue. This counter-positioning provided early competitive protection but weakens as dedicated digital competitors emerge.
4. Switching Costs: LOW
As noted, customers face minimal friction changing brokers. This represents flatexDEGIRO's greatest strategic vulnerability.
5. Branding: MODERATE
The DEGIRO brand carries meaningful recognition across Europe for low-cost investing. The flatex brand is strong in German-speaking markets. Brand trust matters in financial services, providing some competitive insulation.
6. Cornered Resource: WEAK
flatexDEGIRO possesses no truly unique resources that competitors cannot replicate. Technology, banking licenses, and talent are available to well-funded competitors.
7. Process Power: EMERGING
The company's proprietary technology stack and operational expertise built over years represent process advantages. Integration of flatex and DEGIRO systems creates embedded organizational capabilities that competitors cannot quickly replicate.
Key Metrics to Monitor
For investors tracking flatexDEGIRO's ongoing performance, three metrics deserve priority attention:
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Commission per Transaction: This measures pricing power and product mix. Q3 2025 showed €4.83, up 12% year-over-year. Rising commissions indicate successful monetization improvements; declining commissions signal competitive pressure.
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Customer Retention Rate: With retention at ~99%, small changes matter enormously. A decline to 97% would roughly triple annual customer losses. Monitor quarterly cohort data for early warning signs.
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Assets Under Custody Growth: Assets under custody growing to €83.5 billion as of June 2025, representing a 37% increase year-over-year. AUC growth compounds through market appreciation, net inflows, and new customer additions. Declining AUC would signal fundamental business deterioration.
XII. Bull and Bear Cases
The Bull Case
1. European Retail Investment Is Underweighted
European households hold significantly more wealth in bank deposits and real estate versus securities compared to American counterparts. Structural shift toward equity investing—driven by zero/low deposit rates, pension system reforms, and generational preferences—provides multi-decade tailwind.
2. Regulatory Moat Strengthens
Post-BaFin crisis, flatexDEGIRO has invested heavily in compliance infrastructure. This represents sunk cost that new entrants must replicate. Increasing regulatory complexity actually advantages established, well-capitalized players.
3. 2027 Targets Are Achievable
Management's guidance for €650 million revenue and €200 million net income by 2027 implies ~35% revenue growth and ~80% earnings growth from 2024 levels. With customer growth continuing, crypto and securities lending launching, and operational efficiency improving, these targets appear reasonable.
4. Valuation Remains Attractive
As of the previous close price of €31.70, shares in flatexDEGIRO had a market capitalisation of €3.49bn. Against projected 2027 net income of €200 million, shares trade at approximately 17x forward earnings. For a company growing earnings at double-digit rates with established European leadership, this multiple appears undemanding.
5. M&A Optionality
flatexDEGIRO could be either acquirer or target. Its banking license, technology platform, and customer base would be valuable to larger financial institutions seeking European retail distribution. Alternatively, the company could consolidate smaller competitors to accelerate scale.
The Bear Case
1. Competition Intensifies
Trade Republic's momentum is undeniable. Robinhood's European entry adds another well-funded competitor. A price war could compress margins industry-wide, particularly as PFOF disappears.
2. Interest Rate Sensitivity
ECB rate cuts will reduce interest income. Management claims commission growth will offset, but the transition introduces risk. If trading volumes disappoint while rates fall, earnings could compress.
3. Technology Disruption Risk
The pace of financial technology innovation means today's cutting-edge platform becomes tomorrow's legacy system. Continuous investment required to maintain competitive parity may pressure margins.
4. Regulatory Risk Persists
While BaFin issues are largely resolved, new regulatory requirements could emerge. The PFOF ban requires business model adaptation. Increased capital requirements reduce return on equity.
5. Founder-Management Dynamics
Bernd Förtsch holds ~19% and now sits on the Supervisory Board. His public criticism of previous management demonstrates willingness to intervene. New CEO Oliver Behrens must navigate this relationship while executing strategy.
Key Risks and Monitoring Points
| Risk Factor | Probability | Impact | Monitoring Indicator |
|---|---|---|---|
| Competitive price pressure | High | Medium | Commission per transaction trends |
| Interest rate sensitivity | Medium | Medium | Interest income as % of revenue |
| Regulatory escalation | Low | High | BaFin communications, capital requirements |
| Technology disruption | Medium | High | Platform reliability, feature parity |
| Founder intervention | Medium | Medium | Supervisory Board communications |
Conclusion: Europe's Brokerage Battle Is Just Beginning
FlatexDEGIRO's journey from Bavarian publishing side project to European brokerage leader encapsulates the possibilities—and perils—of financial services disruption. Bernd Förtsch's bet that retail investors deserved better than predatory bank fees proved correct. The flatex-DEGIRO merger created genuine continental scale. And the post-crisis turnaround under Oliver Behrens demonstrates that even severe regulatory setbacks can be overcome.
Yet the competitive landscape has never been more challenging. Trade Republic's $5.3 billion valuation and 8 million customers signal enormous resources committed to the same market. Robinhood's arrival brings American playbooks and war-tested technology. The EU's PFOF ban will reshape industry economics in ways no one can fully predict.
For investors, flatexDEGIRO offers exposure to European retail investment growth through an established leader with demonstrated operational capabilities. The stock's 120% recovery from crisis lows reflects restored confidence but also raises the bar for continued performance.
The bull case rests on structural tailwinds in European retail investing, defensible scale advantages, and attractive valuation against growth potential. The bear case emphasizes intensifying competition, interest rate sensitivity, and execution risks inherent in a rapidly evolving industry.
One thing is certain: the battle for European retail investors is far from over. FlatexDEGIRO has earned its position at the table. Keeping it will require continuous innovation, operational excellence, and disciplined capital allocation through whatever competitive storms lie ahead.
Key Metrics Summary
| Metric | Value | Trend |
|---|---|---|
| Customers | 3.29 million (June 2025) | ↑ 14% YoY |
| Assets Under Custody | €83.5 billion (June 2025) | ↑ 37% YoY |
| H1 2025 Revenue | €278 million | ↑ 15% YoY |
| H1 2025 Net Income | €82 million | ↑ 34% YoY |
| Customer Retention | ~99% | Stable |
| Commission per Transaction | €4.72 (Q2 2025) | ↑ 9% YoY |
| Market Capitalization | ~€3.5 billion | |
| 2027 Revenue Target | €650 million | |
| 2027 Net Income Target | €200 million |
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