Finance firm Singapura Finance and digital payments startup MatchMove Pay are believed to have partnered for Singapore's digital bank license.
They will be gunning for a full-bank license that will allow them to collect deposits from retail customers, according to a «Business Times» report. It is still unclear if there are more members in the consortium. The digital full-bank license comes with an eventual capital requirement of S$1.5 billion for the holders, and will require the entities to be Singaporean-controlled.
Singapura Finance had said that this was part of its «strategic positioning into the financial technology era» as the move represented an opportunity for the group to acquire a stake in a business that has possible long-term growth potential.
Half The Applications Not Yet Revealed
The Monetary Authority of Singapore earlier said that it has received a total of 21 digital bank applications - 14 of them wholesale, and seven for the full-bank licence. Less than half have been made public.
Singapura Finance, the smallest of the three listed finance companies in the city-state, has a minority stake of about 1.6 percent in MatchMove which it paid $5 million for, according to a Singapore Exchange filing in October 2019. The finance company arrived at a $295 million pre-money valuation of MatchMove based on the startup's current and future sales pipeline.
Based on the latest available audited financial statements made in a filing, MatchMove recorded a net loss of about S$20.4 million for the financial year ended 31 Dec 2017.
Digital Wallet
MatchMove operates a digital wallet that allows businesses to make online and offline payments via prepaid cards issued instantly. It is headquartered in Singapore with offices in India, Indonesia, Vietnam, and the Philippines.
In September last year, MatchMove's founder and group chief executive Shailesh Naik said that it acquired a stake of up to 20 percent in Singapore peer-to-peer lending platform MoolahSense to boost its SME lending capabilities in the region, with plans to raise that to a majority stake over the next 12 months.
Profit Fell At Singapura Finance
As for Singapura Finance, its latest third-quarter results for 2019 showed that profit after tax fell 42.7 percent to S$1.88 million from a year ago due to lower writebacks for impairment losses on loans and advances.
The group's total loans net of allowances increased by 7.4 percent to S$730.5 million as at Sept 30, 2019, compared to 31 Dec 2018, but total deposits decreased by 8 percent to S$668.7 million for the same period. The finance company's market capitalization stands at about S$141 million, compared to its peers Sing Investments & Finance at S$224 million and Hong Leong Finance at S$1.2 billion.
Hong Leong is another finance company that was said to be considering a digital banking bid, but it has since issued a statement to say that it did not submit an application. Sing Investments & Finance has also confirmed that it did not apply for a digital banking license.
