NAB buys neobank 86 400 for $220m, plans to merge with UBank

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on January 29, 2021
NAB buys neobank 86 400 for $220m, plans to merge with UBank

Big four bank NAB announced it has acquired neobank 86 400 in order to accelerate the growth of its digital subsidiary UBank.

The $220 million purchase is expected to be completed by mid 2021, subject to approval from the Treasurer, the Australian Prudential Regulation Authority (APRA), and the Australian Competition and Consumer Commission (ACCC). 

UBank and 86 400 will continue to operate as separate businesses until the transaction is finalised. 

Chief executive of 86 400, Robert Bell, said he was proud of what the neobank had achieved in such a short period. 

“Over the past 18 months, we’ve challenged the status quo of banking through innovative products, services and technology," Mr Bell said.

"86 400 and its customers will benefit from NAB’s capital and balance sheet strength and investment spend to support accelerated growth and continued innovation, helping even more Australians take control of their money.”

Buying a home or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for owner occupiers.

Lender

Variable
More details
UNLIMITED REDRAWSSPECIAL OFFER
  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
UNLIMITED REDRAWSSPECIAL OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
Variable
More details
AN EASY DIGITAL APPLICATION
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
AN EASY DIGITAL APPLICATION

Neat Variable Home Loan (Principal and Interest) (LVR < 60%)

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
Variable
More details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES
  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
Variable
More details
NSW/VIC/SA METRO & INNER REGIONAL AREAS$5000 CASHBACK. T&Cs APPLY.
  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
NSW/VIC/SA METRO & INNER REGIONAL AREAS$5000 CASHBACK. T&Cs APPLY.

Variable Home Loan (Principal and Interest)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of May 25, 2022. View disclaimer.

In an email to customers, 86 400 said day-to-day, nothing would change and no action was needed. 

"You'll continue to be an 86 400 customer, bank using the 86 400 app and make purchases with your physical 86 400 card or connected Apple Pay, Google Pay, or Samsung Pay wallet.

"You can also expect the same rapid rollout of smart products and features that you'll be used to as an 86 400 customer."

It's unknown what savings account interest rate 86 400 customers will receive when the acquisition is approved, or whether the 86 400 brand will remain. 

"We’ll continue to have competitive rates and fees, but with even greater scale, enabling us to help even more Australians take control of their money," Mr Bell told Savings.com.au.

"While we are still working through some specifics such as the combined business name, our intent is for the look, feel and experience to reflect the best of both businesses."

Just over a month ago, 86 400 was boasting $200 million in home loans, with Robert Bell stating in July the bank wanted $2 billion in loans by the end of 2021. 

With Xinja's infamous collapse in December and the sale of 86 400, it's a challenging time for the neobank sector. 

Up Bank, a digital subsidiary of Bendigo and Adelaide Bank, boasts 300,000 savings account customers but is yet to launch a home loan product. 

Meanwhile, other notable entrant to the sector, Volt, launched in late 2019, is yet to launch a product. 

But Mr Bell said the partnership with UBank would dramatically accelerate growth and help even more Australians reach their financial goals. 

“Coming together with UBank gives us the scale, funding and capital to dramatically accelerate our growth and reach even more Australians with our smarter approach to banking,” he said.

UBank chief executive, Phillippa Watson, said UBank had a proud history of innovation, which would only be strengthened through its partnership with 86 400.

“Combining with 86 400 will bring together UBank’s established business and 86 400’s experience and technology platform to help us meet the changing needs of our customers," Ms Watson said.

"We are looking forward to having the 86 400 team join us to help deliver the next generation of simple, fast and mobile banking solutions.”

UBank launched what may be Australia's lowest advertised home loan rate just a week ago, offering a three-year fixed home loan rate of 1.75% p.a. (2.22% p.a. comparison rate), for owner occupiers paying principal and interest. 


Image source: 86 400

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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Alex joined Savings.com.au as a finance journalist in 2019. He enjoys covering in-depth economical releases and breaking down how they might affect the everyday punter. He is passionate about providing Australians with the information and tools needed to make them financially stable for their futures.

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