DGAP-News: Varengold Bank AG explains necessary details on the published order of additional capital requirements by BaFin

• Previous capital surcharge reduced from 1.5% to 1.0%
• No serious violations or effects identified

Hamburg, 25/02/2022 - The German Federal Financial Supervisory Authority (BaFin) ordered Varengold Bank AG [ISIN: DE0005479307] to comply with additional capital requirements in accordance with Section 10 of the German Banking Act (KWG) on 21 January 2022 and then published this measure with a short passage on 24 February 2022. Varengold Bank welcomes and supports this action to promote transparency in the financial sector by the responsible supervisory authority. In order to provide the public and market participants with a complete picture beyond the current state of knowledge, Varengold Bank would like to supplement the previously published information regarding the capital measure with further details and a historical review.

A regular audit in accordance with Section 44 of the German Banking Act (KWG) to review the correctness of the business organisation in the context of the changed business model already took place in 2018. As a result, there were five F3 findings (serious violations/impacts) in 2019 and a decision on additional capital requirements in the amount of 1.5%. All reported deficiencies were promptly remedied by the bank.

A follow-up audit took place in the first half of 2021 - a completely normal banking supervisory process. This audit resulted in only two F3 findings, which concerned procedures in the bank's risk inventory and risk management. A large part of the tasks within the scope of the findings had already been completed by the bank until end of 2021. There were no F4 findings (serious violations/impacts) in either audit.

Varengold Bank is pleased that BaFin has taken note of the positive development of the Bank and has reduced the additional capital requirements from 1.5% to 1.0%. This is a comparatively low level compared to other market participants who have had a capital surcharge of up to 3%.

With a core capital ratio of 16.7% as at the end of January 2022, Varengold Bank has complied with the regulatory limit of 10.8% without any problems. January 2022 was also very satisfactory in terms of profitability: the bank's pre-tax profit is slightly above plan.

About Varengold Bank AG
Varengold Bank is a German financial institution founded in 1995 and granted a full banking licence in 2013. In addition to its head office in Hamburg, the bank has presences in London and Sofia. Core business areas are Marketplace Banking and Commercial Banking. Within Marketplace Banking, the focus is on the cooperation with European fintechs, especially lending platforms. Varengold Bank's service portfolio includes Funding, Debt and Equity Capital Markets products, Fronting Services for products subject to banking licence requirements and International Payment Services as well as Trade Finance. Varengold Bank is registered with the Federal Financial Supervisory Authority (BaFin) under no. 109 520 and its shares (ISIN: DE0005479307) have been listed on the Open Market of the Frankfurt Stock Exchange since 2007. For more information, see www.varengold.de.

Disclaimer
This release contains forward-looking statements that involve certain risks and uncertainties. Future results may differ materially from those currently anticipated due to various risk factors and uncertainties, such as changes in business, economic and competitive conditions, currency exchange rate fluctuations, litigation uncertainties or investigations, and availability of financial resources. Varengold Bank AG assumes no responsibility for updating the forward-looking statements contained in this release.