NAB subsidiary UBank gets Federal Court approval for takeover
National Australia Bank’s digital subsidiary UBank has been given the tick of approval to acquire neobank 86 400.
In a statement on Tuesday, NAB announced the Federal Court had cleared UBank to wholly acquire the independent player.
NAB, the nation’s largest business bank, announced in January its intention to acquire 86 400 for $220m to boost the digital capacities of UBank and scale of its customer base.
UBank chief executive Philippa Watson said the deal would create a more competitive banking alternative outside of the big four, which dominate Australia’s financial market.
“Bringing together UBank and 86 400 will help deliver on NAB’s long-term strategy to enhance the customer experience and meet their changing needs,” Ms Watson said.
“This will create a stronger and more competitive banking alternative for Australian customers.
“Together we will develop a leading digital bank that attracts and retains customers at scale and pace and creates the next generation of simple, fast and mobile banking solutions.”
NAB’s acquisition of the smaller player is one of the latest consolidations in the neo-banking sector following the collapse of Xinja last year.
Neobanks, before the pandemic, were tipped to be a sector disrupter by offering better deposit rates and cheaper lending to digital-savvy consumers wanting simpler banking services.
86 400 entered the industry in 2019 and offered home loans, deposit accounts and everyday banking.
86 400 chief executive Robert Bell said the merger would ensure the company’s tech team would be able to produce innovative banking solutions at a larger scale.
“We look forward to joining forces with UBank to take our smart approach to banking mainstream,” he said.
The scheme of arrangement relating to the acquisition will come into effect on Wednesday.
NAB’s proposal was subject to approvals from Treasury, the Australian Prudential Regulation Authority and the Australian Competition and Consumer Commission.
Ubank has a digital customer base of about 600,000, while 86 400 had a customer base of 85,000.
NAB shares at 1.20pm AEST were 0.4 per cent lower at $26.97.
Read More: NAB subsidiary UBank gets Federal Court approval for takeover