NAB to purchase neobank 86 400, combine with UBank

The 86 400 mobile app.

NAB has announced plans to purchase neobank 86 400, which it will combine with its digital offshoot UBank in a bid to accelerate growth and innovation.

The decision is still subject to shareholder approval, though 86 400’s team of directors have unanimously recommended that shareholders vote in favour of the scheme. 

“This will significantly fast-track our growth, propelling our business, customer numbers and balance sheet to a position which would’ve otherwise taken five years,” said 86 400 chief executive Robert Bell.

Since launching in September 2019, 86 400 has attracted 85,000 customers and $375 million in deposits with its mobile-led platform. It also has $270 million in approved residential mortgages.

NAB became a minority stakeholder in 86 400 after purchasing 18.3 per cent of shares last year. It informed the ASX on Friday morning it intends to acquire the remaining shares, which it estimates will cost approximately $220 million.

86 400 chairman Anthony Thomson said the partnership with UBank will allow the neobank to “dramatically accelerate our growth and reach even more Australians with our smarter approach to banking.”

“It means we’ll be able to invest even more into developing smart products, experiences and services, helping our customers own their home faster and reach their goals sooner with smarter spending and saving.”

UBank CEO Philippa Watson also struck a positive tone, saying the transaction will allow the two digital players to continue to deliver innovative banking solutions to Australians.

“Combining with 86 400 will bring together UBank’s established business and 86 400’s experience and technology platform to meet the changing needs of our customers,” she said.

The purchase will still need to be approved by various official bodies, including the Treasurer, the Australian Prudential Regulation Authority (APRA) and the Australian Competition and Consumer Commission (ACCC). 

It is expected to be finalised by mid calendar year 2021. Until then, both 86 400 and UBank will continue to operate as separate businesses.

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