An Australian bank that collapsed has urged its 6000 customers to withdraw $100 million worth of deposits before it starts closing accounts from next Tuesday.
Volt, a digital bank called a neobank which was launched in 2017, announced it was handing back its banking licence to the regulator on Wednesday.
It was the first start up to gain the banking licence in January 2019 after the government sought to increase competition in the sector.
The bank’s demise means 140 staff have lost their jobs after the board made the decision to close the business. It said it failed to raise enough funds to support its plans to write mortgages.
Volt chief executive Steve Weston described its closure as an “incredibly sad day”.
“We’ve built something as a team that Australia really needs to bring banking competition to the market. We’ve got technology and capability that simply doesn’t exist in Australia today,” he said.
“But for us to take that to a public launch, we need petrol in the car and by petrol we need capital. And in the current market, being able to raise the amount of capital that we needed to be able to scale up was a task that we couldn’t accomplish.”
He added as a bank it needed a lot more funding than a normal businesses and that “was the challenge that we were unable to overcome”.
Volt had been seeking to raise $200 million since February, but said the pandemic and the current challenging global economic climate had hampered those efforts.
It had previously raised $212 million over seven private rounds since its inception.
0 Comments