UK-based NeoBank Revolut is considering expanding into the highly competitive mortgage market in Australia in order to take market share from the ‘Big Four’ retail banks, Reuters has reported.

Revolut became the first internationally-headquartered bank to receive an unrestricted Australian Deposit-taking Institution licence last month, backed by a commitment to invest nearly 400 million Australian dollars (£209 million) in the country over the next five years.

Revolut Australia chief executive Matt Baxby told Reuters that the bank is preparing to expand into the mortgage market, which is dominated by the Big Four banks, which together control 70 per cent of Australia’s total banking sector and has been described by the news outlet as “cut-throat”.

“It's almost a natural progression that you move into more of those relationship-based (mortgage) products. That's a massive pool in Australia and also pretty heavily contested,” Baxby told Reuters. “All the Big Four have their cannons pointed at the mortgage market.”

He added that he believed Revolut should succeed as it already had 1.2 million customers in the country before its banking licence was approved, echoing comments he made when the bank first acquired its banking licence.

The four largest banks in Australia, Commonwealth Bank, National Australia Bank, Westpac, and ANZ Group, have withstood challenges from several international competitors including Citigroup and HSBC, and successfully crowded out the previous NeoBanks attempting to enter the market.

Two Australian NeoBanks, Xinja and Volt, closed in 2020 and 2022 respectively after failing to gain enough traction against the Big Four, with Reuters reporting that analysts attributed Xinja’s failure to offering high deposit rates without launching lending products quickly enough to offset the high costs this incurred.

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