DIGITAL BANKS

More China tech companies eyeing Singapore banks' lunch

Yillion and Hande groups latest known China entrants in race for digibank licence; they're part of bid led by iFast Corp

Singapore

CHINA tech firms are circling Singapore's banking sector, with top names having joined the race for digital wholesale bank licences here.

On Friday morning, mainboard-listed iFast Corporation announced it has led a consortium with two China partners - Yillion Group and Hande Group - to apply for a Singapore wholesale digital bank licence.

Yillion operates one of four digital banks in China and counts China's Meituan Dianping - which is listed in Hong Kong - as one of its key shareholders. Hande is a China fintech company founded by Cao Tong, the former president of WeBank, China's first digital bank that is also backed by Tencent.

Besides Yillion and Hande, Jack Ma's Ant Financial and TikTok owner ByteDance are also in the running for a similar digibank licence.

Lim Chung Chun, iFast chairman and chief executive, said a digital banking licence will allow the company to bring solutions to the small and medium-sized enterprises (SME) market that has been underserved by banks.

"We believe that there is currently a big opportunity in Singapore for a new bank to become the 'bank of choice for SMEs', particularly for loans," he said, adding that an iFast-led digital bank will be able to tap Singapore's growing role as a leading wealth management centre. iFAST itself is a wealth management fintech platform with assets under administration of almost S$10 billion as at Sept 30, 2019. One of iFast's shareholders is Singapore Press Holdings (SPH), which publishes The Business Times. SPH subsidiary SPH Invest holds a 15.21 per cent stake in iFast as at March 8, 2019, according to the fintech firm's annual report for 2018.

iFast shares closed at S$1.06 on Friday, up two Singapore cents or 1.9 per cent.

Its Chinese partners join Ant Financial and Tiktok owner ByteDance Technology in their keen interest to tap the underbanked SMEs in Singapore.

A digital wholesale bank licence will allow the successful licensee to serve SMEs and other non-retail segments. This is unlike digital full bank licences which will allow the licensee to take deposits from retail customers and provide a wide range of financial services.

Bloomberg on Thursday reported that Ant Financial is eyeing a wholesale digital banking licence. A spokesman had told Bloomberg that the Chinese giant aims to contribute "to the development of the digital banking landscape in Singapore". As of press time, Ant Financial did not respond to BT's email requesting comment.

BT reported earlier that China's ByteDance, which owns the popular video-sharing app TikTok, had also applied for a wholesale digital banking licence.

ByteDance - said to be the world's largest tech startup - has a reported valuation of more than US$75 billion as at 2018. It had earlier signalled intentions to go into financial services. It declined to comment when contacted by BT.