Aspiring digital bank Novatti Ltd unveiled its results for FY20, indicating increased card transactions – and therefore increased revenue – as COVID-19 lockdowns have boosted its processing revenue by 60 per cent.

Nevertheless, the group reported an after-tax loss of A$10,960,326, an increase of 121 per cent on the $4,954,313 loss for the year to 30 June 2019.

This loss comes despite a total annual revenue increase over the previous financial year, to $11.86 million in FY20. Novatti’s cashflow continued to strengthen over the FY20 year, with quarterly operating revenue of $3.05 million (unaudited) for the June quarter, slightly higher than its March 2020 quarterly result.

Product manufacturing and operating costs as a percentage of receipts from customers reduced from 75.9 per cent in FY19 to 68.5 per cent in FY20, reflecting the lower direct costs to deliver its increased processing revenue.

These numbers show that despite the challenges, Novatti has processed transactions for more than $2 billion in payments annually, said managing director, Peter Cook, at a briefing to explain his company's announcements yesterday.

Cook said Novatti has averaged approximately 50 per cent annual revenue growth for each of the last three years, leading one shareholder to ask when Novatti is likely to make an actual profit. Cook deflected the question: "We are not formally forecasting on that profit point."

He noted that Novatti is on track to have its application for a banking licence, although the regulator has deferred any action until March 2021. Novatti will by then have begun to buy in a core banking platform that meets APRA's guidelines.

"APRA is particularly focused on the need for a solid banking platform to secure customers funds," Cook said. The CEO said the Novatti banking unit's strength will be addressing "cross border issues for consumers, businesses and, eventually, trade finance".

"We want to provide the smart tech on top, whether its fraud detection or AI – that's the value add that we will be focused on."

Cook added that Novatti's core point of differences is its focus on licences, along with the discipline that comes with being a Visa card issuer in Australia, and the governance required of a publicly listed company.