Australian financial services firm AMP Bank has acquired the residential mortgage portfolio of Nano, a digital bank. 

The deal expands AMP Bank’s residential mortgage book by around A$400m ($279.89m). Nano’s assets primarily include owner-occupied, principal and interest loans.

Nano customers will move to AMP Bank in March 2023. 

AMP Bank group executive Sean O’Malley said: “The continued strong growth of AMP Bank has been largely organic, driven by investments in our service, digital capabilities and competitive offers to attract new customers, particularly through the mortgage broker channel. 

“However, in line with our objective to grow the bank and increase our direct-to-customer channel, we will continue to consider acquisition opportunities where they make strategic sense and maintain the high quality of our loan book.

For Nano, the deal will allow the neo bank to roll back its home loan business and provide financial services technology. 

“Nano’s business has evolved to provide technology to financial services companies rather than being a home loan provider,” Nano was quoted by Australian Financial Review (AFR) as saying in a letter to customers

“To ensure you continue to have a great home loan product, Nano has made the decision to move your Nano home loan to AMP Bank.”

According to AFR, the deal comes after Nano failed to secure around A$75m ($52.48m) in funding in August. 

In a statement two months later, Nano said it had stopped considering new loan requests, stating the “decision was made in the ordinary course of business as we wait for funding costs and credit spreads to normalise”.