Avenue Bank Unrestricted ADI Status Awarded by APRA
(4 March 2024 – Australia) The Australian Prudential Regulation Authority (APRA) has granted Avenue Bank a licence to operate as an authorised deposit-taking institution (ADI) without restrictions.
Last year Avenue Bank created an innovative product for the business banking market seeking to unlock almost A$10 billion of small business capital tied up in bank guarantees used to secure commercial leases.
The fintech start-up challenger bank was preparing to launch the product last year once its unrestricted banking licence was granted by the prudential regulator. Avenue was licensed by APRA in September 2021 as a Restricted ADI following delays after APRA paused approvals of new banks during the pandemic.
New Zealand’s Heartland Bank, a shareholder alongside Liberty Financial Group, considered acquiring Avenue in 2022 as the start-up struggled with funding following the collapse of Volt Bank, causing negative sentiment towards neobanks in general. Heartland ultimately switched its acquisition focus to Challenger Bank to drive its expansion in Australia.
“A bank guarantee is typically the last thing negotiated in the deal, and often forces small businesses to scramble to find that money because some small businesses don’t have that cash on hand. Some have to raise equity or debt to get it. We are turning that on its head. We are different to the other neos because we have created an innovative product” commented Avenue Bank CEO Peita Piper.
Subscribe