Varengold Bank has slashed its 2024 earnings guidance for the second consecutive month, after creating an additional reserve buffer to cover potential risks from the regulator’s special audit of the troubled bank.
The Hamburg-based bank, which has invested in a number of European peer-to-peer lenders, has reduced its earnings guidance for the 2024 financial year to €2.1m (£1.8m).
It attributed this to its decision to allocate a further €4m to its contingency reserve to cover potential risks arising from historical dividend arbitrage issues, its ongoing special audit by the German regulator, and to create an additional risk buffer for its “ongoing transformation process”.
Read more: Varengold has “satisfactory start” to 2024 as special audit continues
The German Federal Financial Supervisory Authority ordered a special audit of the bank in 2023 due to possible compliance violations, which led to restrictions in its payment transaction business.
Varengold had previously forecast pre-tax earnings of €11.3m for the 2024 financial year, which it reduced to a range of €6.25m and €6.75m last month.
It said this was due to additional severance payments to managing directors who left at the beginning of March 2025 and for administrative costs associated with the special audit.
