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- Novatti (NOV) will launch a new bank named the International Bank of Australia (IBOA) after being granted a restricted authorised deposit-taking institution (RADI) licence
- The licence allows the company to conduct banking business as a restricted authorised institution before meeting the requirements to become a fully operational business
- The restricted phase lasts for a maximum of two years, during which time Novatti — which holds a 91-per-cent interest in IBOA — will seek to progress to a full ADI licence
- At the end of the September quarter, the company reported a cash balance of $14.5 million following a 98 per cent year-on-year increase in September quarter sales revenue
- Shares in Novatti soar 56.76 per cent to 29 cents at 11:49 am AEDT
Novatti (NOV) will launch a new bank named the International Bank of Australia (IBOA) after being granted a restricted authorised deposit-taking institution (RADI) licence.
Australia’s banking regulator, the Australian Prudential Regulation Authority (APRA), granted the company the licence, allowing it to conduct banking business as a restricted authorised institution before meeting the requirements to become a fully operational business.
As part of its restricted operations, IBOA will have time to seek the level of investment required to operationalise the business, test its operational model, and progress its compliance with the full prudential framework.
The restricted phase lasts for a maximum of two years, during which time Novatti — which holds a 91-per-cent interest in IBOA — will seek to progress to a full ADI licence
Managing Director Peter Cook said the RADI licence grant was a “very significant milestone” in the delivery of Novatti’s long-term strategy and was the culmination of several years of investment and development.
“We see banking services as significant as it underpins the infrastructure and capability to Novatti’s core payments business while also giving us the ability to increase margins,” Mr Cook said.
“The delivery of this licence, and now the launch of International Bank of Australia, has therefore formed a core part of Novatti’s growth strategy for so long.
“In addition, the bank has the strong advantage of being able to leverage Novatti’s existing payments ecosystem and global footprint to help win customers quickly.”
IBOA CEO Guy Carvalho said the new bank would focus on working with fintechs — like Novatti — who required an “innovative and nimble” banking partner.
“For a long time, we have known that traditional banks have not been able to keep up with the requirements of the disruptive business models of fintechs — particularly those offering alternative ways to make or accept payments, domestically or internationally,” Mr Carvalho said.
“IBOA will overcome this challenge, leveraging technology to enable the seamless end-to-end movement of money.”
At the end of the September quarter, Novatti reported a cash balance of $14.5 million, with a further $12.8 million expected as a special dividend from Reckon.
Novatti’s five-year average annual revenue growth reached 76 per cent in FY22, and the company recorded a 98 per cent year-on-year increase in the quarterly sales revenue over the September quarter.
Shares in Novatti soared 56.76 per cent to 29 cents at 11:49 am AEDT.
