Another bidder emerges for Singapore digital bank licence

The Monetary Authority of Singapore unveiled plans to grant as many as five virtual bank licences to boost competition and innovation, and is set to announce the winners in mid-2020.
The Monetary Authority of Singapore unveiled plans to grant as many as five virtual bank licences to boost competition and innovation, and is set to announce the winners in mid-2020.PHOTO: ST FILE

SINGAPORE (BLOOMBERG) - A consortium comprising Singapore-based fintech Advance.AI, Hong Kong-listed financial services firm Sheng Ye Capital and Singapore-based PhillipCapital is the latest known contender for a wholesale digital banking licence.

It joins other bidders ranging from gaming company Razer, Grab Holdings and Chinese billionaire Jack Ma's Ant Financial in the race for the sought-after Singapore permits.

For the Advance.AI consortium, the licence bid is "an opportunity for us to impact an under-served segment", the company's chief marketing officer Mi Li said, confirming an earlier report in The Business Times. "Singapore SMEs often find it impossible to get the credit they need to grow their business."

The Monetary Authority of Singapore (MAS) unveiled plans last year to grant as many as five virtual bank licences to boost competition and innovation, and is set to announce the winners in mid-2020. South-east Asia's digital lending market is expected to more than quadruple to US$110 billion (S$148 billion) by 2025, according to a report by Bain & Co, Google and Temasek Holdings.

With the Advance.AI consortium, there are five known and confirmed bids for the three wholesale bank licences which allow the holders to serve SMEs and other corporate clients. They carry a lower capital requirement of $100 million and allow foreign entities to take a majority stake.

There are three known, confirmed bids for the two full bank licences. Their holders can take deposits from retail customers but need to have $1.5 billion in capital and be Singaporean-controlled.

Beyond Consortium, led by one of Asia's largest massage chair makers, V3 Group, and stored-value card company EZ-Link, submitted a bid for a full bank licence, according to a statement on Sunday (Jan 5). The group also includes the Singapore Business Federation; Temasek unit Heliconia Capital Management; MSIG Insurance (Singapore), a subsidiary of Mitsui Sumitomo Insurance; and property giant Far East Organization.

The group intends to promote connectivity and support local small and medium-sized enterprises in extending their footprint in Asia, according to a statement.

Singapore-listed fintech firm iFast Corp said on Friday (Jan 3) it submitted a bid for a wholesale bank licence at the end of December together with a consortium of Chinese partners.

 
 
 
 

iFast's Chinese partners are Yillion Group and Hande Group. Yillion operates one of four digital banks in China and counts Hong Kong-listed Internet firm Meituan Dianping as a shareholder. Hande is a Chinese fintech company founded by Mr Cao Tong, the former president of Webank, China's first digital bank that's also backed by Tencent Holdings Ltd.

iFast is tapping the unique strengths and experiences of each consortium member to better address some of the inefficiencies, and assist the under-served market segments in Singapore's banking industry, chief executive officer Lim Chung Chun said in its exchange filing.

Grab, one of South-east Asia's largest operators of online businesses from finance to ride-hailing, is partnering Singapore Telecommunications to apply for a full bank licence. Another bidder is Razer, which has teamed up with homegrown Singaporean entrepreneurs and Asian billionaires.

With additional information from The Straits Times