Neobank 86 400 quintuples loan book after Xinja falters

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on December 21, 2020
Neobank 86 400 quintuples loan book after Xinja falters

In its year-end update, neobank 86 400 said it now has $200m in home loans on its books, less than a week after Xinja handed back its banking licence.

Less than six months ago, 86 400 had announced $40 million in home loans.

The $200 million was achieved through expanding its broker network, with the neobank gaining access to 10,000 across the country.

The bank's CEO Robert Bell said the bank is heading into 2021 with "solid footing".

"To build a sustainable business you need to grow both sides of the balance sheet (lending and depositing). That's why launched our home loans products to market just weeks after we launched the bank," he told Savings.com.au.

"We're making good progress with the lending side of the business, and are really optimistic that this growth will accelerate in 2021 and continue us along our path to profitability."

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
Advertised rate Comparison rate* Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval

VariableMore details
LIMITED TIME 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%
LIMITED TIME 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%
VariableMore details
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
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
FixedMore details
USE A MARKET LEADING APP TO HELP YOU PAY OFF YOUR LOAN SOONER

Fixed Home Loan 1 year (Principal and Interest) (LVR < 80%)

  • Make up to $20,000 additional repayments per fixed term
  • Redraw available – lets you access any extra loan repayments you’ve made
  • Choose to rate lock for 90 days (fee applies)
USE A MARKET LEADING APP TO HELP YOU PAY OFF YOUR LOAN SOONER

Fixed Home Loan 1 year (Principal and Interest) (LVR < 80%)

  • Make up to $20,000 additional repayments per fixed term
  • Redraw available – lets you access any extra loan repayments you’ve made
  • Choose to rate lock for 90 days (fee applies)
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.
VariableMore details
ZERO APPLICATION FEESFEE FREE OFFSET

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees
ZERO APPLICATION FEESFEE FREE OFFSET

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees

Rates correct as of January 18, 2022. View disclaimer.

Meanwhile, Xinja CEO Eric Wilson cited COVID-19 economic challenges as the reason for the bank shuttering, in his email to customers.

"After COVID-19 and an increasingly difficult capital-raising environment affecting who is willing to invest in a new bank, we are convinced that the best thing is for Xinja to pivot away from being a bank," he said.

At the time of shuttering, Xinja had more than $450 million in customer deposits, yet was $36 million in the red in the 2019-2020 financial year.

The news comes after it was revealed the bank had secured a multi-million dollar deal from a 'mysterious' Chinese firm in mid-2019, as reported in the Australian Financial Review.

Earlier in 2020, Dubai-based 'World Investments' also injected in excess of $400 million into the neobank. 

Xinja's Mr Wilson and other founders appear to have deleted their social media accounts.

via GIPHY

A rocky road for savers

In its formerly-public roadmap, Xinja had plans to offer loan products by the end of 2020.

At the time of its closure announcement, Xinja had no loan products, and a 1.50% p.a 'Stash' savings account closed to new customers.

Xinja announced its then-2.25% p.a savings account at the start of the year, at a time many other banks were struggling to offer anything higher than 1.80% p.a. 

The account was distinct in that customers did not have to meet any criteria to attain the rate, such as making a minimum deposit every month.

Savings accounts experienced a bloodbath in 2020, after three Reserve Bank rate cuts down to a cash rate of just 0.10%.

For example, the formerly market-leading savings account from RAMS sat at 3.00% p.a just over a year ago, and from February 2021 will offer just 0.15% p.a if bonus criteria is met.

Need somewhere to store cash and earn interest? The table below features savings accounts with some of the highest non-introductory and introductory interest rates on the market.


Photo by Outer Digit on Unsplash

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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Harrison is Savings.com.au's Assistant Editor. Prior to joining Savings in January 2020, he worked for some of Australia's largest comparison sites and media organisations. With a keen interest in the economy, housing policy, and personal finance, Harrison is passionate about breaking down complex financial topics for the everyday consumer.

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