And there they go. Few Banking Day readers will be surprised.
Radioactive from the day they launched a wildly overpriced high yield account, the board of Xinja Bank were sinking their own boat.
At 2.25 per cent the Stash Account was best-in-market and the hot money flowed.
Millennials, the core target market, were as open-minded as expected and the customer list and deposit holdings soared.
So in no time at all the board yelled STOP.
The maths was against them. Pay 2.25 per cent on your liabilities - and earn way, way less on your own deposits in a market where the cash rate (in February) was 50 basis points and money market rates even less – well, then most of every dollar in new capital will be shredded.
Mortgage Business 16 December 2020
A neobank has announced its plans to return all funds to depositors and relinquish its ADI licence.
Xinja Bank, which was authorised to operate as a restricted ADI in December 2018 and was granted a full banking licence by the Australian Prudential Regulation Authority (APRA) in September last year, has announced plans to withdraw its transaction and savings account products and return its authorised deposit-taking institution (ADI) licence.
“After a year marked by COVID-19 and an increasingly difficult capital-raising environment, and following a review of the market in Australia, Xinja has decided to withdraw the bank account and Stash (savings) account and cease being a bank. This was an incredibly hard decision,” Xinja said in a statement.