The Bendigo and Adelaide Bank Ltd (ASX: BEN) share price is pushing higher in early trade despite no new announcements from the Aussie bank. This comes after rival Xinja announced its retreat from the neobank market.
Why the Bendigo and Adelaide Bank share price is on the rise
The big news today impacting the Bendigo and Adelaide Bank share price actually doesn’t come from Bendigo itself. However, one of its key neobank rivals has announced it will turn in its authorised deposit-taking institution (ADI) license and return capital to its members.
Xinja has today announced it will hand back its banking license after market pressures made the business unviable. The Aussie neobank burst onto the scene with high savings rates but no lending product in the market.
That has seen significant cash burn to pay out its account holders without any money coming in the door from lending activities. That’s despite the Australian Prudential Regulation Authority (APRA) granting Xinja the license in September 2019.
So, what does this have to do with Bendigo? The Bendigo and Adelaide Bank share price is charging higher thanks to broad market positivity and its status as a neobank competitor.
Bendigo is a key partner and collaborator in Up, another Aussie neobank founded in 2018. That means the retreat of Xinja could strengthen Up’s position in the increasingly-saturated neobank market.
It’s a similar story for National Australia Bank Ltd (ASX: NAB), which has its own neobank product via its UBank division.
The Bendigo and Adelaide Bank share price has pushed 1.2% higher in early trade while NAB shares are up 1.8% to start the day. It’s good news across most of the financial services sector with Commonwealth Bank of Australia (ASX: CBA) shares also climbing after the company announced a merger between Aussie Home Loans and Lendi.
The S&P/ASX 200 Index (ASX: XJO) has pushed 1.0% higher to nearly 6,700 points thanks to a strong performance on Wall Street overnight.