A decision on whether local financial services aspirant In1Bank Limited has secured a full banking licence should be known in the next few weeks.
The startup, which is focused on building a digital banking platform aimed at online small businesses and the under-served Chinese community in Australia, initially secured a restricted banking licence in December 2019.
However, the global pandemic the following year stalled the bank’s platform build and capital raising efforts, which resulted in APRA granting several extensions to its restricted banking authority.
Banks with restricted licences are normally required to obtain a full banking licence within two years but the prudential regulator relaxed that condition in light of the business disruption triggered by Covid-19.
In1Bank’s restricted authority is due to expire on 12 June, which means the company’s future now hangs on APRA granting a full licence in the coming few weeks.
The bank is the brainchild of Chinese-born investment banker and financier James Tong who has worked in Sydney for the past 40 years.
Tong was the founding managing director of BNP Paribas’ Australian equities operation in the 1990s and later chaired the advisory board of non-bank lender, AIMS Financial Group.
In an interview with Banking Day in 2020, Tong said he wanted to develop In1Bank into a truly bilingual operation, with customers able to transact on the company’s digital platforms through Chinese and English text interfaces.
In1Bank’s board is probably the most culturally diverse in the local banking sector, with only one of the company’s seven directors - Professor Stephen Van Der Mye - born in Australia.
Other foundation members of the board were born in Kenya, Malaysia, Singapore, the UK and China.
A lot is riding on securing the full licence.
In the last 18 months, In1Bank has hired scores of staff, especially IT specialists to work on roll out of the company’s cloud-driven banking systems.
At least 30 professionals listed on LinkedIn cite In1Bank as their employer.
Investors also have millions hanging on APRA’s decision.
A few months after it entered the Australian banking market three years ago, In1Bank had a paid up capital base of around A$10 million.
Since then it has more than doubled that to $24 million following a string of share sales to new investors in the last six months.
According to official ASIC filings, investors this year have been paying $300 a share to build stakes in the company.