Money by Gerard Cockburn 29th Jan 2021 9:44 AM National Australia Bank will acquire neobank 86 400 as part of its strategy to grow its digital-only subsidiary UBank. The major banking group confirmed on Friday it would acquire full ownership of 86 400 for $220m, noting the takeover was primarily to grow UBank s customer base and enhance its digital banking technology. NAB s acquisition of a smaller player is the latest consolidation in the neo-banking sector after the collapse of Xinja last year. Neobanks before the pandemic were tipped to be a sector disrupter by offering better deposit rates and lower lending rates to digital-savvy consumers. 86 400 entered the industry in 2019 and offered home loans and deposit accounts.
National Australia Bank will take over Australian neobank 86 400 in a $220 million deal that is planned to flesh out the major bank’s digital subsidiary, UBank.
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NAB to acquire 86 400 By Annie Kane 29 January 2021
National Australia Bank is set to acquire 100 per cent of the shares in digital lender 86 400, in a bid to help grow NAB’s digital brand, UBank.
The major bank revealed that it had first commenced discussions with 86 400 in late 2020.
To support 86 400’s growth, it then subscribed for a minority stake in 86 400 and currently holds an approximate shareholding of 18.3 per cent in 86 400.
It now proposes to acquire the remainder of shares in 86 400 by way of a scheme of arrangement in a deal estimated to cost approximately $220 million.
The transaction, which is subject to approval by shareholders and regulators, would see all 120 people in the 86 400 team become part of the NAB group.
Deal to accelerate digital strategy of Australia’s No. 2 lender Regulator to scrutinise deal for potential competition concerns (Recasts, adds competition regulator comment, analyst, background)
Jan 29 (Reuters) - National Australia Bank is snapping up small online-only bank 86 400 Holdings for A$220 million ($168.9 million) as it broadens its digital offering in a move analysts said also effectively swallows the competition.
The deal announced on Friday, which gives NAB access to 86 400’s technology at a time the market is shifting towards online banking and payment platforms, will be reviewed by the competition regulator.
86 400, named after the number of seconds in a day, is one of four so-called neo-banks granted licences to provide loans and take deposits in Australia as regulators sought to improve competition in a sector dominated by NAB and its three Big Four peers.
Bank tech war heats up as big four face generational change
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