WEALTH management platform iFast Corporation is looking at its global banking business and e-pension services to drive growth in the next five to 10 years, and chief executive Lim Chung Chun is expecting the global bank to break even in H2 2024. 

 

In a briefing with reporters and analysts on Wednesday (Jul 26) to discuss the company&rsquo s latest quarterly earnings, Lim acknowledged that iFast&rsquo s banking business, or iFast Global Bank, reported a loss of S$2.2 million in the second quarter ended June and a loss of S$3.9 million for the first half of the year. 

 

iFast Global Bank was born out of iFast&rsquo s acquisition of an 85 per cent stake in UK-based BFC Bank for a price tag of £ 40 million (S$73.4 million). The transaction was first announced in January last year, and was completed in April last year. 

 

Although the bank has posted losses since the acquisition, Lim urged investors to look past the initial losses. He said the latest quarter&rsquo s S$2.2 million loss is &ldquo by any standard a small number&rdquo .

 

&ldquo Some players are burning (the same amount) in a day,&rdquo he said. &ldquo I&rsquo d just like investors to understand what we&rsquo re trying to achieve.&rdquo

 

Going into 2024, Lim said iFast will also be in a position to boost its dividend payouts to shareholders, as the group&rsquo s overall cash flow starts to improve &ldquo quite significantly&rdquo . 

 

Lim noted that competition in the banking sector is intense in some areas, particularly with the rise of digital banks that are threatening the incumbent players. Such players are also offering additional perks like cashbacks to their customers, he said. 

 

However, he said the number of competitors in each market is &ldquo typically limited&rdquo . He also argued that iFast Global Bank is also targeting a unique portion of the market &ndash customers who are looking for wealth management platforms or digital banking platforms located outside their home country. 

 

The banking sector is also becoming more digital, and people are able to transfer &ldquo millions of dollars with their mobile phones&rdquo , Lim said.  

 

If iFast had set its sights on targeting the high net worth individuals, it would have faced intense competition from other banks. But the company is instead focusing on the retail masses &ndash an area which most banks &ldquo are not interested&rdquo in pursuing. 

 

iFast on Tuesday posted earnings of S$3.6 million for its second quarter ended June, reversing from a net loss of S$2.7 million in the year-ago period. Net revenue was up 6.5 per cent to S$31.8 million.

 

Shares of iFast were up 6.2 per cent on Wednesday as at the mid-day break to S$4.94, making the counter one of the top gainers on the Singapore bourse as traders piled into the stock. 

 

Apart from the global banking business, Lim said the company is also expecting its e-pensions business to drive its growth in the near term. He said Hong Kong&rsquo s e-pensions division is expected to contribute more significantly to the group&rsquo s results. 

 

iFast is expecting the newly-launched Orso e-pension services to start making &ldquo sizeable&rdquo contributions to its assets under administration in Hong Kong from Q1 2025, which will also bring about material positive contributions to the topline and bottomline figures of iFast&rsquo s Hong Kong business. 

 

Despite the rising focus on its global bank and e-pensions units, Lim said iFast&rsquo s core business would still be its wealth management unit. However, the different businesses are likely to become more interlaced and connected, which would also bring about more efficiency for the group as a whole. 

FINTECH platform iFast has reversed into the black with a net profit of S$3.6 million for its second quarter ended Jun 30, as financial market conditions stabilised this year which benefited its core wealth management platform business. A year earlier, it made a net loss of S$2.7 million. 

 

Earnings per share stood at 1.22 Singapore cents for the second quarter. In the year before period, the company had a loss per share of 0.92 Singapore cent. 

 

Net revenue for Q2 rose 6.5 per cent to S$31.8 million from S$29 million previously. 

 

While markets and investor sentiments remained volatile, net inflows remained positive and improved as compared with the previous quarter, rising 78.6 per cent quarter-on-quarter to S$559 million, iFast said in a bourse filing on Tuesday (Jul 25). 

 

Profit before tax from the group&rsquo s non-banking operations grew by 62 per cent year-on-year to S$7.4 million in Q2. However, its banking business reported a loss of S$2.2 million within the same period. 

 

The group said it is in the &ldquo early stages&rdquo of building up the digital transaction banking and digital personal banking divisions at iFast Global Bank which is based in the United Kingdom. 

 

Contributions from its banking business are expected to still be negative in the second half of the year, iFast said. However, it expects iFast Global Bank to play a &ldquo major role in the growth of the group in the medium to long-term, particularly beyond 2025.&rdquo  

 

As at Jun 30, the company&rsquo s assets under administration grew 8 per cent year on year to S$18.8 billion.

 

Looking ahead, iFast said it expects its overall revenue and profitability to show marked improvements.

 

&ldquo The expected improvements will come about as the ePension division in Hong Kong starts to contribute more significantly, and as the core wealth management platform business continues to progress,&rdquo it said. 

 

An interim dividend of 1.10 Singapore cents per share was proposed for Q2, unchanged from the year before. The dividend will be paid on Aug 21.