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Bendigo and Adelaide Bank (ASX: BEN) has today announced it will buy Melbourne-based fintech Ferocia for $116 million to accelerate the bank's digital strategy.
It comes in conjunction with the release of the bank's FY21 results, with net profit more than doubling to hit $524 million in the period.
The acquisition of Ferocia, co-founded by Dominic Pym and Grant Thomas, comes after nine years of partnership, during which the Melbourne-based company built the bank's online platform Up - a mobile-only digital banking platform.
Whilst the Ferocia team will join the bank, the fintech will continue to operate independently as a standalone division.
"The announcement unites our strong customer, community and innovation heritage with Ferocia's market leading digital capability to deliver all Australians world-leading digital banking experiences," Bendigo and Adelaide Bank managing director Marnie Baker said.
"Through our partnership, we have embraced Up as a strategic, digital testbed - reimagining new banking experiences for a new generation of customers - and its rapid growth has far exceeded all expectations."
Ferocia co-founder Dominic Pym said the fintech's partnership with the bank started with an objective to "re-imagine banking".
"When we launched Up in 2018 we set out to disrupt the industry by building a completely different experience through a technology-led banking - not bank-led technology - approach," Pym said.
"The launch of Up ushered in a new digital banking age through a unique fintech and bank partnership.
"With a vision to be Australia's number one consumer lifestyle brand, the time is right to scale Up through a deepened relationship and new product offerings from the bank, whilst bringing Ferocia's expertise to the rest of the bank's highly engaged customer base."
Consideration for Ferocia will be paid in shares, with a portion of the price being contingent on future performance.
It comes as Bendigo and Australia Bank today announced a statutory net profit of $524 million for FY21, up 172 per cent on the prior year.
In addition, cash earnings after tax were $457.2 million, which demonstrates the bank's strategy is working according to Baker.
"We have delivered on what we said we would do and more by growing customer numbers and market share in both lending and deposits," Baker said.
"We continue to act with care, customers and community in mind and our transformation has improved our efficiency, productivity, speed to market and customer experience.
"At the same time our balance sheet, brand proposition, risk profile and investments have made our business stronger for all stakeholders for the future."
Shares in BEN are down 8.96 per cent to $10.10 per share at 11.32am AEST.
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