SINGAPORE - Shares of Singtel and iFast Corporation were heavily traded on Thursday (July 1) after the companies announced separately their applications for a digital bank licence in Malaysia.
Singtel said before the stock market opened on Thursday that it had applied for a digibank licence in Malaysia through its joint venture with Grab and “a consortium of other investors”. No further information was provided.
A day earlier, wealth management platform iFast Corporation announced it is leading a consortium applying for a licence from Bank Negara Malaysia. If its application is successful, iFast said it will own a 40 per cent stake in the digital bank.
Singtel shares rose two cents, or 0.9 per cent, to an intraday high of $2.31 on Thursday. They closed the day at $2.28, down0.4 per cent from the previous day at $2.29, with some 21.4 million shares changing hands.
Meanwhile, iFast closed the day up 13 cents, or 1.6 per cent, to $8.28, with a hefty862.1 million shares traded.
Mr Lim Chung Chun, chairman and chief executive of iFast, said that the beneficial equity ownership of the consortium will be 57 per cent Malaysian.
iFast’s Malaysian consortium partners include Koperasi Angkatan Tentera Malaysia, which is the cooperative organisation for Malaysian military personnel.
The other Malaysian partners are THZ Alliance, a Malaysian investment firm founded by Tengku Dato’ Dr Hishammuddin Zaizi, who is a cousin of the Sultan of Selangor, and Mr Lee Thiam Wah, founder and major shareholder of mini-mart chain 99 Speed Mart.
The Malaysian partners will give the consortium a strong local presence and help execute its strategy of targeting the bottom 40 per cent of the Malaysian population, which Mr Lim believes remains unbanked or underserved.
Part of the consortium will also comprise Yillion Fintech, an arm of Yillion Bank, one of four digital banks in China founded by Zonfar Financial Holding and Hong Kong-listed Meituan Dianping.
“We will also benefit from Yillion’s experience in digital banking in China as we expand in Malaysia,” Mr Lim said.
Bank Negara will be issuing up to five digital bank licences next year. The deadline for applications was June 30.
CGS-CIMB analyst Andrea Choong said competition will be tough in Malaysia, with over 40 applicants reportedly vying for the licence.
Other contenders for the licences include consortiums led by Malaysian telco Axiata and digital payments firm Pertama Digital. Among Malaysian companies that have announced a desire to apply are real estate developer Sunway, budget airline AirAsia via its financial app BigPay and tech company Green Packet.
Several other Singapore firms that have voiced interest in Malaysian digital banking include e-commerce giant Sea Group and gaming company Razer Fintech.
The Monetary Authority of Singapore last year awarded digital full bank licences to Sea Group and the Grab-Singtel consortium, while iFast’s application to secure a digital wholesale bank licence in Singapore was unsuccessful.