Melbourne-based banking aspirant Eurus Capital is hopeful it will begin operating as a restricted bank around the middle of next year, but the company remains under pressure to boost its capital base.
Eurus, which is chaired by John Ford - a former CEO of Australian Military Bank - applied for a banking licence in January 2020.
Eurus made the application when it traded under the name of Asia Pacific Capital.
The board of the company has undergone a transformation since the application was submitted almost three years ago.
Former managing director Julie Elliott has departed the scene along with other founding directors such as Kelvin Ho and Ronald Hoy.
Ford joined the company in May 2021 and now oversees a board dominated by Victorian businesspeople including former ANZ and Deutsche Bank investment banker, Gavin Xing.
While APRA continues to assess the banking application, the company has since secured a credit licence and a provisional financial services licence from ASIC.
Eurus is trying to position itself as a specialist provider of online banking services to Australia’s migrant communities.
Bank of China’s recent success in the local retail banking sector has exposed underserviced customer niches across the industry.
If it launches next year Eurus is expected to compete vigorously against BoC and another local startup – In1Bank - for customers with business and personal ties to countries in Asia.
According to regulatory records, Eurus has raised total paid up capital of around A$8.7 million.
However, disclosures in the company’s latest financial accounts indicate the company needs to boost its capital base significantly to maintain viability.
At the end of June Eurus Capital Limited had net assets of only $698,878 after it recorded a net operating loss of $2 million.
While directors said in notes to the accounts that they were satisfied the company had the ability to continue as a going concern, they also highlighted the importance of a program to raise $3 million in fresh capital in 2023.
“The consolidated entity’s viability as a going concern depends on the successful and timely conclusion of its capital raising effort,” the directors stated in the accounts.
“If above events are not successful, that may cast significant doubt on the consolidated entity's ability to continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business.
“Consequently a significant uncertainty of going concern exists.”
This disclosure was also referenced by the company’s auditor Darren Scammell of Grant Thornton in his 2022 audit report.
Although Eurus now has accumulated losses of more than $7 million, it achieved a milestone in 2022 after creating its first source of revenue.
The company collected more than $100,000 in commission income from brokering loans on behalf of borrowers.