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Xinja exits the neobank scene: What happened, and what does it mean for the competition?
Xinja founder and chief Eric Wilson. Source: supplied.
Xinja has made a shock exit from the Australian neobank scene, handing back its Authorised Deposit-taking Institution (ADI) licence and closing customer accounts, while naming COVID-19 as a major factor.
Following what it called “a review of the market”, Xinja announced it will withdraw its bank account and Stash savings account, and stop operating as a bank.
Instead, it will “refocus the business”, in other areas, including its US share trading product Dabble.
Xinja largely blames the failure on the COVID-19 pandemic, and the challenge of raising funds for a particularly capital-intensive business in this environment.
Susan Walsh/AP
News out of the US, including confirmation of president-elect Joe Biden’s win has buoyed the New Zealand sharemarket. Investor enthusiasm for ANZ was due, in part, to news that the Australian Prudential Regulation Authority was looking to relax some of its constraints on bank dividends, McBride said. Power companies also continued to tick up on the back of Tiwai Point aluminium smelter negotiations. “That has been people looking at the Tiwai smelter and potentially taking a position that the smelter will stay open. People seem reasonably confident about a deal being brokered,” McBride said. Retirement village company Summerset provided the market with guidance for its full-year results.
Neobank Xinja blames coronavirus pandemic for its flop
Technology by Gerard Cockburn 16th Dec 2020 8:56 AM Digital-only bank Xinja will close its savings and transaction accounts, saying the pandemic had stifled its ability to attract new investors. The neobank, which launched in 2019, said on Wednesday it would close its Xinja bank and stash accounts, saying capital raising initiatives had become impossible because of the economic impacts caused by the coronavirus pandemic. At the beginning of 2020, Xinja advertised a lucrative 3 per cent savings rate on its deposit accounts that was initially retained after the Reserve Bank clipped the cash rate twice in March due to the lockdown.
The Australian share market settled lower on Tuesday, 15 December 2020, as concerns over a coronavirus surge in multiple countries dulled optimism over the vaccine rollout in the U. S. Worries about rising Australia-China tensions also weighed on the market following reports that China has formally banned imports of Australian coal.
At closing bell, the benchmark S&P/ASX200 declined 28.95 points, or 0.43%, to 6,631.30. The broader All Ordinaries dropped 33.58 points, or 0.49%, to 6,866.70.
Shares of major coal producers tumbled amid worries about rising Australia-China tensions after reports that China has formally banned imports of Australian coal.
New Hope Corp. fell almost 11%, Yancoal Australia dropped more than 10% and Whitehaven Coal slid 7%.