Alex Corporation Limited has expanded its paid up capital base by around A$17 million since the end of June last year, according to the company’s most recent filings to ASIC.
Alex Corporation is the holding company for Brisbane-based digital lender and deposit taker, Alex Bank.
The group launched a Series D capital raising in August last year and, according to the disclosures made to ASIC, has raised almost $17 million of the $25 million it had targeted under the program.
The latest disclosures show Alex Corporation holding paid up capital of more than $73 million on 24 January compared to $56.5 million at the end of June 2022.
The holding company has also lodged its 2022 financial accounts with ASIC, which show it made a net loss of $19.1 million for the 12 months to the end of June.
While the loss was larger than the negative bottom line of $11.6 million in 2021, it was not a surprise given that the bank invested heavily in its proprietary technology, product development and recruitment last year.
Alex Bank, which began marketing personal loans through brokers in December 2021, almost quadrupled total loans and advances held on its balance sheet to $27.2 million last year.
The bank has negotiated a string of distribution agreements with leading aggregators such as AFG, Loan Market Group and Consolidated Finance Group.
Retail deposits also grew to more than $1 million in 2022 following the limited release of an online savings account to families and friends associated with the bank in December 2021.
The deposits base is expected to increase significantly this year after the recent addition of term deposits to the product menu.
In a commentary attached to the 2022 accounts, directors of Alex Corporation flagged that the group’s automated credit decision platform was ready to process more volumes through proprietary sales channels and brokers.
“The Alex Intelligence platform is now not only a credit decision engine but also an end-to-end origination platform, covering all activities from loan application to settlement for both the direct and broker acquisition channels,” the board told shareholders in its report.
“This sets us up for further success in the coming year as this technology is leveraged for additional lending and deposit products.”
Alex Bank is planning to turn its first annual profit in 2025, but will depend on raising more capital from investors to fund its lending and regulatory capital needs this year.
In notes to the accounts, directors highlighted the group’s reliance on additional equity raisings in the short term.
“As the Group builds scale in lending and enters the deposit market, the Group will also continue to build the customer experience and add new products offerings to drive revenue and achieve business plan objectives,” they told shareholders.
“Net cash flows from operating activities will continue to be negative in the short to medium term due to the expansion of the team and continued investment in products and customer acquisition.
“The Directors are aiming to improve the cash flows of the Group by raising capital from existing and new investors to meet internal and APRA capital and liquidity requirements.”
The board decided to prepare the 2022 financial report on a going concern basis because they believed future capital raisings would be successful.
Alex Bank acquired banking status in July 2021 when APRA granted it a restricted banking licence.
The prudential regulator removed special conditions on the licence in December.
At the end of June the bank employed the equivalent of 60 full time staff at its Brisbane headquarters and an office in Sydney.