Neobank International Bank of Australia is struggling to meet its funding target under a capital raising and, with its principal backer Novatti Group drawing a line under any further financial support, it may hand back its banking licence if “funds are not received imminently”.
APRA granted IBoA a restricted ADI licence in November 2022, in force until November this year. Conditions of the restricted licence included a A$100 million cap on balance sheet assets.
It is targeting a niche in global payments banking, with a “borderless bank account” in its development program.
IBoA was launched with the backing of payments company Novatti, which has invested several million dollars in the bank and reported in February that it held an 86 per cent share.
Over the past year, Novatti’s priority has shifted from a growth strategy to one focused on streamlining and simplifying operations, controlling costs and improving margins.
It sold a 19.9 per cent shareholding in accounting software company Reckon, using the proceeds to repay debt, and signalled its reluctance to commit more funds to IBoA.
In an update released yesterday, Novatti reported that IBoA is still negotiating commitments to a Series A capital raising that was launched last year.
It said: “If additional funds are not received imminently IBoA will request to return the restricted licence to APRA. Novatti will not be participating in additional capital raisings for IBoA.”