Xinja Bank has cast doubt on its launch date for personal loans in the Australian market, as it continues to battle strategic challenges triggered by the lockdown.
In a blog posted on the company’s website at the weekend, chief executive Eric Wilson indicated that the bank might not be in a position to launch a personal loan product by July as set out in its product road map.
“We are being very prudent in terms of spend over this period, and are working flat out to complete the build of our lending infrastructure,” Wilson wrote on the blog.
“The exact date for the launch of personal loans is uncertain, as much depends on how the post-COVID world turns out, but be assured that we will launch them as soon as is commercially and ethically responsible.”
Wilson included in his blog post a still from Charlie Chaplin’s 1918 silent classic, “A Dog’s Life”.
The film tells the story of a battler surviving hardships with the help of a heroic dog named “Scraps”.
The movie has an upbeat ending after Scraps sniffs out a hidden fortune that transforms the life of his owner.
Wilson is also looking to reverse the fortunes of his company that have been dealt a cruel hand by the pandemic.
The biggest headache is the delay on regulatory approvals for a $400 million-plus investment in the neo-bank by Dubai’s World Investments.
Xinja needs the WI capital to help expedite the rollout of its lending operation.
Wilson did not comment on the prospect of the bank meeting its plan to rollout home loans sometime between October and December.
Xinja is under pressure to launch revenue-generating products to counter its big spend on developing a lending platform and the interest it must pay depositors who had lodged $510 million with the bank at the end of April.
Wilson also confirmed part of a disclosure by Xinja’s community manager Camilla Cook on 26 May that the bank had raised an additional $10 million in capital from investors.
But he did not confirm whether Xinja raised most of the fresh capital in April or in the second last week of May as Cooke suggested to a Xinja customer on the bank’s community forum:
“We’ve also did another capital raise and raised $10 million last week, so we are where we need to be,” Cooke told customers on 26 May.
Xinja is yet to notify ASIC of any outcome of a capital raising in the second last week of May.
The company last notified ASIC of an increase in its paid up capital on 23 April, in which it reported its paid up equity at almost $83 million.
The bank had $74 million of paid up capital at the end of March, which means that $9 million was raised in April.
Banking Day is seeking a response from Xinja’s external public relations firm about the timing of recent capital raisings by the company and whether the $10 million confirmed by the bank last week includes funds committed by investors in April.
Banking Day is also seeking comment from Xinja’s representatives on whether the company met its disclosure obligations.