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

Variable
More details
  • Min 30% deposit
  • No monthly or ongoing fees, add 0.10% for offset
  • Unlimited redraws

Variable Home Loan (LVR < 70%)

  • Min 30% deposit
  • No monthly or ongoing fees, add 0.10% for offset
  • Unlimited redraws
Variable
More details
REFINANCE ONLY
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
REFINANCE ONLY

Variable Rate Home Loan – Refinance Only

  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
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
NO ONGOING FEES
  • 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
NO ONGOING FEES

Yard PAYG Home Loan (Principal and Interest) LVR ≤ 80%

  • 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

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 August 20, 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.

Lender

000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
More details
  • Take money out at any time without affecting your bonus rate.
  • Open up to 10 Save accounts and get bonus interest on all of them, including shared Save accounts.
  • Get bonus interest on a combined balance of up to $250K across all your Save accounts.

Save Account

  • Take money out at any time without affecting your bonus rate.
  • Open up to 10 Save accounts and get bonus interest on all of them, including shared Save accounts.
  • Get bonus interest on a combined balance of up to $250K across all your Save accounts.
4000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
More details
A WELCOME RATE FOR 4 MONTHS
A WELCOME RATE FOR 4 MONTHS

Savings Account (Amounts < $250k)

    4000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
    More details

    High Interest Savings Account (< $250k)

      010000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
      More details

      Savings Maximiser (<$100k)

        05001$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
        More details

        Goal Saver

          DailyMonthly02500$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
          More details

          Saver Account (<$250k)

            020000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
            More details

            Boost Saver (< $250k)

              400$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
              More details

              Easy Saver

                001$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
                More details

                Growth Saver ($1 - $25k)

                  000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
                  More details

                  Growth Saver Account

                    4001$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
                    More details

                    Online Saver ($1-$100k)

                      0500$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
                      More details

                      Reward Saver

                        Rates based on a savings balance of $10,000. Sorted by total interest rates. Refer to providers' websites for bonus rate conditions and for any applicable fees and charges. Rates correct as of August 20, 2022. View disclaimer.


                        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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                        author-avatar
                        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 strives to deliver and edit news and guides that are engaging, thought-provoking, and simple to read.

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