flatexDEGIRO’s 2025 deposit growth outpaced securities-backed customer lending

flatexDEGIRO ended 2025 with €6.22 billion of liabilities to customers, €1.37 billion of gross loans to customers and €165.6 million of net interest income. Deposits grew faster than the loan book, leaving a lower loan-to-deposit ratio and substantial central-bank cash. The loans discussed here are cash credit secured by securities, not a programme lending customers’ shares to short sellers.[1]

The finding should not be confused with the client-money model used by many CFD brokers. DEGIRO says an individual Cash Account is opened in the customer's name at flatexDEGIRO Bank, with a personal IBAN and protection under the German deposit-guarantee scheme up to €100,000. The deposits are liabilities of a bank. Securities are handled separately through asset-segregation arrangements. That legal distinction is essential before comparing the figures with segregated broker balances elsewhere.[2]

A €1.93 billion increase in customer deposits

The annual report records liabilities to customers of €6.2226 billion at the end of 2025, up from €4.2955 billion a year earlier. The increase was €1.9271 billion, or 44.9%. Management's key-performance presentation rounds customer cash holdings to €6.2 billion and similarly describes a 45% increase. The balance-sheet figure is the more precise value for ratio analysis.[1]

DEGIRO states that it does not currently pay interest on uninvested cash in the Cash Account. The annual report likewise says customer deposits generally do not bear positive interest. That gives the group a funding advantage when market interest rates are positive: it can earn interest on central-bank balances and other placements while paying little or no corresponding deposit interest to much of the customer base.[3][1]

The model was material even after European rates declined. Interest income was €173.2 million, interest expense €7.6 million and net interest income €165.6 million, compared with €170.8 million in 2024. Net interest income therefore represented 29.6% of record group revenue of €559.8 million. It was also slightly larger than consolidated net profit of €160.4 million, although that comparison is not a claim that interest income alone produced the profit: operating expenses, commissions, taxes, credit costs and other items sit between the two measures.[1]

Where the deposit base sat

The group reported €4.4182 billion of cash and cash equivalents, including approximately €4.0025 billion held with central banks. The central-bank balance equalled about 64.3% of customer deposits, while total cash and cash equivalents equalled about 71.0%. Those ratios are balance-sheet snapshots, not a tracing exercise. They do not prove that a specific customer's euro funded a specific asset, but they show the broad liquidity profile against the customer liability.[1]

The customer-loan note records gross loans of €1.3728 billion, up from €1.1943 billion. After allowances, the balance-sheet amounts are €1.3726 billion and €1.1934 billion respectively. Using the gross note consistently, lending grew 14.9% and equalled 22.1% of year-end customer liabilities, compared with 27.8% a year earlier. Mixing gross and net balances would slightly change those comparisons.[1]

Those ratios describe the allocation of the year-end balance sheet. They do not establish that the bank is safer than a retail-bank peer: business models, loan composition, deposit concentration and regulatory treatment differ. The group’s separate operating KPI for customer cash is €6.1894 billion, which is not identical to the €6.2226 billion accounting liability used here. Each calculation retains its stated denominator.[1]

The interest engine survived lower ECB rates

The European Central Bank reduced its deposit facility rate by 100 basis points during 2025, from 3% to 2%. flatexDEGIRO says that lower rates reduced the yield on Bundesbank demand deposits and indirectly lowered rates on securities-backed loans. Yet net interest income fell only modestly because customer cash increased sharply, the securities-loan book expanded and a more active treasury strategy contributed from the second half.[1]

The result illustrates a volume-versus-yield trade-off. A lower return on each euro of liquid assets can be offset by a much larger deposit base. The group added roughly €1.93 billion of customer liabilities in one year, while net interest income declined only €5.2 million. Without detailed average-balance and yield disclosures for every asset and deposit category, it is not possible to isolate the exact contribution of volume, rate changes and treasury reallocation. The direction, however, is clear from management's explanation.[1]

The customer proposition and the group economics diverge

For the customer, the Cash Account is designed as transaction liquidity for investing rather than a savings product. DEGIRO says it cannot be used for ordinary banking functions and currently pays no interest. It emphasises the personal IBAN and statutory deposit protection. For the group, the same balances are a low-cost funding source and a major earnings input. Both descriptions can be true simultaneously.[2][3]

That divergence does not by itself establish unfairness. A broker-bank can price a bundled service across commissions, trading access, cash handling and credit. Customers may accept zero interest in exchange for platform features or low transaction costs. The relevant transparency question is whether users understand the opportunity cost of uninvested cash and the difference between bank-deposit protection, investment-asset segregation and investment risk.[2][3]

The annual report shows why that question is economically material. A 29.6% net-interest contribution to revenue means the cash policy is not incidental. It is one of the group's largest revenue engines. The growth of customer deposits can improve earnings even when customers do not trade more frequently, while commission revenue depends on transactions and product mix.[1]

What the figures do not show

The year-end balances do not disclose how customer cash was distributed by country, brand or individual account size. They do not show how much exceeded the €100,000 statutory guarantee at customer level. Nor do they provide a simple one-to-one reconciliation between customer deposits and central-bank cash because the bank manages its balance sheet on an aggregate basis.[1][2]

The customer-loan book should not be described as unsecured consumer lending or confused with stock lending. The group describes the securities-backed credit as fully collateralised. Collateral can mitigate credit risk, but its value changes with markets and lenders still need limits, margin calls and liquidation procedures.[1]

Deposit growth changes both opportunity and liquidity risk

A larger low-cost deposit base increases the amount on which the bank can earn a spread, but it also increases the cash that customers can request back. Brokerage deposits can be behaviourally different from salary accounts or fixed-term savings: they may rise before investment, remain after a sale or leave rapidly when customers rebalance. The relevant asset-liability question is therefore not only how much cash the bank holds, but how stable customer balances are under market stress.[1]

The year-end central-bank and cash ratios indicate substantial immediate liquidity, yet they cannot replace a maturity analysis. Some customer cash may be operationally sticky; other balances can move in a day. A full assessment would use average balances, withdrawal scenarios, liquidity coverage metrics and the tenor of treasury investments. Those data are not all reducible to the headline balance-sheet figures.[1]

The €100,000 guarantee does not cover every economic question

The German deposit-guarantee limit protects eligible cash up to €100,000 per customer if the bank fails, subject to the scheme's rules. It does not guarantee investment performance, prevent temporary access disruption or cover securities in the same way. DEGIRO separately explains that investments are held through asset-segregation structures and that an investor-compensation scheme applies in defined circumstances.[2]

Customers with cash above the statutory limit bear a different bank-credit exposure from customers below it, but the public accounts do not disclose the distribution of balances. A €6.22 billion aggregate can be spread across millions of small accounts or concentrated more heavily. The concentration profile is necessary to estimate how much of the deposit base falls outside the guarantee.[1][2]

Margin lending links customer portfolios to bank earnings

The €1.37 billion customer-loan book is primarily secured by securities. When markets rise, collateral values can expand borrowing capacity; when they fall, loan-to-value ratios worsen and customers may face margin calls or forced sales. The bank's credit risk is mitigated by collateral and liquidation rights, but rapid gaps, illiquid securities or concentrated positions can still create losses.[1][4]

Lending grew more slowly than customer liabilities, reducing the gross loan-to-deposit ratio. That shift is consistent with more of the balance sheet remaining outside the customer-loan book at the reporting date. It does not by itself prove a deliberate reduction in risk: the movements can also reflect customer demand, cash inflows and the timing of investments.[1]

A comparison customers can make

Because DEGIRO explicitly says uninvested cash currently earns no interest, a customer can compare the convenience and trading readiness of the Cash Account with the return available from an external deposit or money-market product. The correct comparison includes transfer time, tax, guarantee coverage, platform requirements and the risk of missing an investment opportunity—not interest alone.[3][2]

For the company, even a small change in the average spread earned on €6.22 billion can be material. A hypothetical 25-basis-point change across the full year-end balance would equal about €15.6 million before behavioural, timing and asset-mix effects. That is a sensitivity illustration, not a forecast, but it shows why deposit pricing and ECB policy deserve the same attention as commission schedules.[1]

Credit and capital, not only liquidity, constrain the model

Central-bank cash carries low credit risk, while securities-backed loans consume credit and capital resources. A decision to move more deposits into lending can increase yield but also increase loss-given-default, collateral-management work and regulatory capital requirements. The year-end ratios show that flatexDEGIRO kept most customer funding outside the loan book, but they do not reveal risk weights or stressed capital consumption.[1]

The bank's ability to convert deposit growth into earnings therefore depends on more than the ECB rate. It depends on how much can be placed at central banks, invested in treasury instruments or lent against securities within liquidity, capital and concentration limits. A low loan-to-deposit ratio can preserve resilience while limiting upside; a higher ratio can improve interest income while making market stress more consequential.[1]

A useful follow-up metric would be net interest income per average euro of customer deposits, calculated from monthly or quarterly balances rather than the year-end snapshot. That would distinguish genuine spread compression from growth driven by more cash arriving late in the year. It would also allow customers and investors to see how quickly changes in ECB rates pass through to the bank's earnings when deposit interest remains at zero.[1][3]

The same distinction should guide peer comparisons. A pure broker that segregates client cash and earns no balance-sheet spread is not economically equivalent to a licensed bank that records customer deposits and lends against portfolios. Commission comparisons alone can therefore understate major differences in funding and risk.[1]

The reconstruction changes how flatexDEGIRO should be compared with pure agency brokers. Its revenue mix responds not only to customer growth and trading volumes but also to deposit balances, ECB policy, treasury allocation and demand for securities-backed credit. In 2025, customer accounts rose to 3.5 million, transactions increased and commission income grew, but almost three euros in every ten of revenue still came from net interest.[1]

The strongest conclusion is therefore structural rather than accusatory. flatexDEGIRO's customer cash pool expanded 45% to €6.22 billion, while its securities-backed loan book reached €1.37 billion and net interest income remained €165.6 million despite lower policy rates. Those balances show a broker-bank funding engine operating beneath the trading interface—one that customers and competitors should evaluate separately from headline commission pricing.[1][3]

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