atans1

SingTel, Hong Leong will get digital bank licences

In Banks, S'pore Inc, Telecoms on 01/07/2019 at 5:06 am

MAS to issue up to five new digital bank licences: SM Tharman

Constructive, nation building media

It’s a nap that two of the licences will go to SingTel (or a SingTel jv) and Hong Leong Group

SingTel or a jv led by it will get one of the two digital full bank licences, which will allow licensees to provide a wide range of financial services and take deposits from retail customers. The focus of a SingTel bank will be regional remittances via its regional network of telcos. Think of all the Peenoy and Indon maids who remit money via remittance firms.

Grab or Go-Jek could decide to try to cut a deal with SingTel, rather than apply for a virtual bank licence themselves because they can bring to the party a regional presence via their apps etc. But SingTel may be too greedy to do a jv. I suspect the authorities will make SingTel tie up with Go-Jek or Grab. But the other co will not be left out in the cold (see below) because I think the authorities want competition here between the two and because Temasek has stakes in both: Temasek, GIC got this right in our backyard. Related post: Offered money, Grab it

Hong Leong group will get one of the up to three digital wholesale bank licences, which will allow licensees “to serve SMEs (small and medium-sized enterprises) and other non-retail segments”. Hong Leong Finance is a de facto SME bank though people like Inderjit Singh and Jack Sim are not happy with the way it does biz, and are forever KPKBing for really cheap financing for SME owners, even though it’s a fact that SME owners often divert biz loans to buy property.

Grab, Go-Jek and Razor will try for the other virtual bank licence, though I think they’ll have to find a S’porean partner because

Companies headquartered in Singapore and controlled by Singaporeans will be able to apply for digital full bank licences.

Foreign companies who wish to apply must form a joint venture with a Singapore company, the authority added. The joint venture must meet the headquarter and control requirements. Digital wholesale bank licences are open to all companies.

I’m sure they will try to get M1 owned by Keppel and SPH to partner one of them.

But as I said for Grab and Go-Jek working with SingTel could be a better bet if SingTel is not too greedy. The other could then tie up with M1.

As to Razer? Razer? Who the f@#! is Razer?

 

 

 

 

  1. Unless they’re going to be offering much better interest rates (both deposits & loans), and leverage on lower costs I doubt they’ll really take off. We don’t need yet another payment platform / app, or yet another jump-thru-hoops-like-circus-animals “high yield” savings account.

    OCBC used to have a web platform (Finatiq) which they billed as being S’pore’s first virtual bank many years ago (pre-smartphone, during dotcom years). It started strong, offering deposits at much higher interests than full-service banks. But with the post-dotcom grinding recession, degenerated into simply another online platform hawking unit trusts.

    OCBC subsequently recycled Finatiq’s holding company of Bank Of S’pore into their private banking arm.

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