Why not build a better bank? Why not dream of owning the world?
Why not? asks Australia’s Novatti Limited.
And finally, after years of hoopla and hope, International Bank of Australia takes the stage.
Its curtain call will come sooner than the Novatti insiders and cheer squad will like, but it might do well before then.
Judo Bank is the only successful neobank story in Australia.
Six others – SIX – have hit the wall, folded their tent or proudly gone about the business of going nowhere.
So what’s different about International Bank of Australia and how, really, will Novatti make a fist of it in banking?
Peter Cook, managing director of Novatti had much to be confident and optimistic about at yesterday morning’s investor webinar.
“Novatti does deliver on long term strategies,” Cook said of its entry into the domestic banking system – an Australian licence to complement the two held in Canada and New Zealand, and which will fit alongside an upcoming non-bank licence in Singapore.
Applications for many more licences in other jurisdictions are in the works.
“We are benefiting from a huge thematic, the digitisation of financial services,” Cook said.
The company is a 91 per cent shareholder in the bank, after it chipped in A$5 million more to get the RADI over the line. This lifts its stake from 70 per cent.
The bank is supposed to add $3 million to EBITDA next year. Yeah, right – they are a RADI and cannot have any revenue generating distribution of product to the public in this two year transitional phase.
And banking is a ludicrously costly industry in which to operate. Especially when you are a start-up, and APRA will be all over you.
“We know what we are facing into,” CEO Guy Carvalho said.
Maybe. I’d be expecting Novatti to lose on banking in the early years.
They are serious about payments, that’s for sure and you get the sense the bank CEO Guy Carvalho and Cook know what they are talking about.
“Fintechs need banking services to take the money from where it is now to where it’s going to go,” Carvalho said.
“Fintechs do everything in between.
“The size of the market we believe is significant. We will be a payments bank,” Carvalho said.
IBOA will be a migrant bank by and large.
“We are not going for the rump of the big banks,” Cook said.
They are a payments bank, like Wise. And Wise, by the way, are doing very well.