Debt chaser Collection House buys a piece of Volt Bank
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Debt collector Collection House has invested $8.5 million in Volt Corporation, the owners of Volt Bank, Australia’s first digital bank.
The company says it has the potential to deliver $3 million in profit by the 2020 financial year.
Sydney-based start-up Volt won approval in May last year to become Australia’s first digital bank, and Collection House (ASX:CLH) is so impressed in “the first completely new start-up entity to be licensed as a retail bank in the Australian market since 1981” that it has taken a 4.5 per cent stake in the company.
Unlisted Volt raised $16 million to get its technology off the ground and has since raised more than $45 million, Collection House says.
CLH shareholders were mildly pleased with the news, with shares closing up 2pc on Tuesday at $1.37.
The company originally announced a “strategic alliance” with Volt back in November, though it was light on detail.
But Collection House chairman Leigh Berkley said he was delighted to be raising the stakes.
“This investment is part of Collection House’s ongoing digital transformation strategy, and we are delighted to be working closely with Volt Bank to deliver some real benefits to our customers,” he said.
The funds will go towards developing innovative and ethical financial products for customers, Mr Berkley said.
“We are focused on helping our customers to rehabilitate their finances, enabling them to get back on the road to financial freedom, without the burden of excessive interest rates and costs.”
Mr Berkley remains chairman of Collection House, despite an attempt by eccentric Brisbane businessman Lev Mizikovsky, who holds 11.6 per cent of the company, to oust him.
Collection House went to extraordinary lengths to put other shareholders at ease it late November, releasing a three-page document to the ASX calling into question Mr Mizikovsky’s character.
“Consistent with Mr Mizikovsky’s past behaviour and statements, the letter is littered with inaccuracies and misstatements,” it said. “The truth is inconvenient to Mr Mizikovsky.”