National Australia Bank (NAB) announced its intention to purchase digital “smart bank” 86 400 today. The $664 billion (AUD$867) bank plans to spend $168 million (AUD$220) to purchase the digital newcomer.
Since it was founded in 2017, 86 400 accrued more than 85,000 customers, $375 million of deposits, $270 million in approved residential mortgages, and 2,500 accredited brokers.
NAB will integrate the digital bank into its in-house digital bank competitor, Ubank. Twelve-year-old Ubank, with 600,000 users, anticipates the acquisition will accelerate its growth. Specifically, Ubank cited benefitting from 86 400’s experience and technology platform.
“Bringing together UBank and 86 400 is consistent with NAB’s long-term strategy and growth plans and will enable us to develop a leading digital bank that can attract and retain customers at scale and pace,” said NAB Chief Operating Officer Les Matheson. “The combined business will deliver accelerated innovation and an enhanced customer experience to create a stronger and more competitive banking alternative for Australian customers.”
86 400 sought to be a “smart bank” and differentiated itself with a fee-free, transparent approach and local call center. The startup had raised $26 million (AUD$34 million) and had recently received its banking license.
The deal is pending regulatory approvals and is expected to be completed by mid-2021.