Its initial target – Australia’s consumer finance market – was said to be worth $142 billion in lending assets (personal loans, credit cards, car loans, lines of credit) with an anticipated $25 billion of new products or loans (including switching) in the coming 12 months.
And according to Alex, there’s a lot less competition with Xinja and Volt now out of the picture, while Suncorp Bank’s headed to ANZ, ME Bank went to Bank of Queensland, 86400 to NAB and UP Bank was acquired by Bendigo and Adelaide Bank.
At the same time, BNPL players and non-bank lenders are battling with higher funding costs, arguably making the new Alex Bank attractive to borrowers.
Investors understand the pitch but, as always, want to see the numbers. Alex Bank reckons it could get a $4.9 billion loan book by FY26, the lion’s share of which would be personal loans sold via brokers and referrers and funded with term deposits.
Alex Bank wants to be profitable from the 2025 financial year, when it expects to record $38.9 million at the cash NPAT line on $125.8 million income.
In banking, to get that sort of high growth you need capital and Alex Bank told potential investors it would likely need to raise equity again in the FY22, FY23 and FY24 financial years, to fuel the fire.
As for the $25 million Series D round, the first $15 million was pegged for meeting required APRA common equity tier one capital requirements, while the next $10 million would flow through to working capital.
Alex Bank is 25.2 per cent owned by management and has already broadened out its share register with raisings in 2021 and 2020.
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