Last week we announced an investment of $433 million in Xinja Bank by World Investments. Eric Wilson, our CEO, talks about the background to this, its context in these strange times, and what it means now and into the future.
This has been an extraordinary few weeks in all our lives.
With the current fight against the COVID-19 pandemic, and of much lesser importance, the recent announcement of the planned substantial future investment into Xinja by Dubai’s World Investments, I thought it was time to pause and talk about these two things and what they mean for all of us in the Xinja family
How has Coronavirus impacted Xinja?
Let me start with COVID-19. Obviously, this is a very serious issue for all of us in Australia and around the world. Xinja’s staff has been operating from home for over two weeks now so far without issue. We’ve done extensive BCP (Business Continuity Planning) and “weakest point” testing and planning and as a 100% digital bank, the day to day has been relatively straightforward. That’s not to say there won’t be operational challenges in the coming months, of course, but we are confident that we’re ready.
There [will be] operational challenges in the coming months…but we are confident that we’re ready.
What impact will there be on Xinja customers?
What this upcoming period of uncertainty does mean for Xinja is that we will be postponing the release of any new features and products until the worst of the pandemic has passed.
There are two reasons for this; firstly we don’t think it’s appropriate to be trying to sell new products and make a big marketing splash right now. Right now should be about keeping people safe, helping those that we can, and hunkering down till the wave passes.
We will continue to launch products to staff, check they work, refine them, and make sure we have a backlog ready to release when things are better.
Secondly, the operational impact of a new product release on dispersed teams is harder to manage. We don’t want to let customers down by putting too much pressure on our Xinjarati and Ops teams when we can’t easily rally around them.
We are using a working assumption that by mid June things will be starting to get back on track. At that point we can look at launching the products we have finished and hopefully help get things back on track for a lot of customers. We will of course review that very frequently as the next few months unfold.
One final thing to mention here, that assuming all continues to go to plan, we will do our very small bit to take care of our customers in these tough times by keeping our interest rates for existing Stash holders at 2.25% for a while yet. Obviously we can’t help with capitalising loan repayments like the big banks as we don’t have a loan book yet, but we hope this goes some way towards doing our bit.
When will new Stash accounts be available?
As we’ve said before, we’ll be looking to offer new Stash accounts again in a couple of months – this now looks like the middle of the year, but we will keep customers informed. We will reprice Stash for the market at the time and offer Stash accounts to existing bank account customers as a priority.
So Xinja has a new investor?
Yes! Xinja has signed a deal with an investment management company from Dubai. We have been working on this investment for over a year and a half, and if Australia and the UAE’s regulators give us permission that investment will start in a month and stretch over the next couple of years. The total investment will be up to A$433million which will ensure Xinja stays safe and strong. Our full media release if you’re interested is here.
More information about World Investments
World Investments is a multi-family office established as a Joint Stock Company in Dubai, UAE, by a number of prominent families. It is a regulated investment company and also holds an investment banking licence and stockbroking company with a seat at both the Dubai and Abu Dhabi exchanges.
It was founded by the Abu Dhabi Investment Group (ADIG) in 2006 which is one of its key shareholders. ADIG has invested in several banks in the Middle East, including Abu Dhabi National Bank, First Abu Dhabi Bank, Commercial Bank International and Dubai Islamic Bank. You can find information about their other investments and initiativeshere.
The CEO of World Investments is His Excellency Sheikh Zayed bin Owaidha – an economist and specialist in corporate turnarounds. He has been one of the leaders of the development of financial markets in the region and is part of the Al Qubaisi family, which helped found the UAE.
World Investments’ chairman is His Highness Sheikh Dr Majid bin Saeed Al Nuaimi, also chairman of the Rulers Court of Ajman and son-in-law of the Ajman ruler, Sheikh Humaid bin Rashid Al Nuaimi III (Ajman is one of the states of the UAE).
What will the money be used for?
The purpose of this money is firstly to provide a strong regulatory capital base to ensure Xinja is in a strong capital position and able to mature as a bank. Other funds will be put to use developing our proprietary technologies, building engineering teams, marketing, and the development of new banking experiences for customers. These will of course continue to be focused on Xinja’s purpose which is to help people make the most out of their money.
As we head into what will be a tough few months for everyone, please keep yourselves and your families safe, inside, and out of harm’s way. As always, stay in touch with us through the forum or the Xinjarati and I look forward to chatting soon in better times.