The company owned by bank National Australia Bank (UBank) has been awarded a license to acquire neobank 86 400.
In a statement on Tuesday, NAB announced that the Federal Court had given the green signal for fully acquiring an independent player.
Long Term Strategy
NAB, the largest commercial bank, announced in January its intention to acquire 86 400 for $ 220m to increase Bank’s digital capabilities and customer base.
Bank chief executive Philippa Watson said the deal would create another highly competitive banking system apart from the four major ones, which controls the Australian financial market.
A Leading Digital Bank
“Bringing together UBank and 86 400 will help deliver on NAB’s long-term strategy to enhance the customer experience and meet their changing needs,” Ms Watson said.
“This will create a stronger and more competitive banking system for Australian customers.
“Together we will build a leading digital bank that attracts and retains customers at a level and speed and enables the next generation of simple, fast and efficient banking solutions.”
Neobank 86 400 Disrupts The Industry
The NAB acquisition of the junior player is one of the latest mergers in the neo-banking sector following the collapse of Xinja last year.
Neobanks, prior to the pandemic, was said to be disrupting the industry by offering better deposit rates and cheaper loans to digital consumers who want simpler banking services.
86,400 entered the sector in 2019 and offered home loans, deposit accounts and daily bank services.
Banking Solutions On A Larger Scale
86 400 chief executive Robert Bell said the merger would ensure that the technology company team would be able to produce new banking solutions on a large scale.
“We look forward to partnering with the Bank to implement our strategic approach to mainstream banks,” he said.
The acquisition planning process will take effect on Wednesday.
The NAB proposal was subject to approval from Treasury, the Australian Prudential Regulation Authority and the Australian Competition and Consumer Commission.
Ubank has approximately 600,000 digital customers, while 86 400 have 85,000 customers.
Shares of NAB at 1.20pm AEST were 0.4 percent lower at $ 26.97.
