Ant Financial may join race for Singapore virtual bank licences

20-Nov-2019 Intellasia | Bloomberg | 6:02 AM Print This Post

Billionaire Jack Ma’s Ant Financial Services Group said it may apply for a virtual banking licence in Singapore, a move that would add a heavyweight contender to the race.

“We are actively looking into this opportunity,” Hangzhou, China-based Ant Financial said in an emailed response to questions from Bloomberg News.

The Monetary Authority of Singapore is offering as many as five digital banking permits to non-banks in a bid to open up the industry to new competitors. A successful entry by Ant Financial would pit China’s largest online financial company against traditional incumbents DBS Group Holdings Ltd and Oversea-Chinese Banking Corp. in the growing market for digital banking in Southeast Asia.

Though Ant didn’t disclose whether it will seek a retail or wholesale license, it will be easier for the Chinese firm to meet the conditions for the latter.

There are up to two licenses for grabs for a full digital bank, which can serve all kinds of customers and require S$1.5 billion in capital as well as local control. Another three would be for wholesale banks, which foreign firms can run and the capital threshold is S$100 million.

OCBC, Southeast Asia’s second-largest lender, has agreed to join peer-to-peer lender Validus Capital Pte. and Temasek Holdings Pte’s venture capital arm to seek a wholesale virtual banking license before the end of the year application deadline. DBS, which operates a digital bank in India and Indonesia, hasn’t expressed any intention to seek a license.

Southeast Asia’s digital lending market is expected to more than quadruple to $110 billion by 2025, according to a report by Bain & Co., Google and Temasek Holdings Pte.

Ant Financial is also getting into digital banking in Hong Kong. Earlier this year, its Ant SME Services (Hong Kong) Ltd unit received a permit from the Hong Kong Monetary Authority to operate a virtual bank in the Chinese territory.

Ant’s payments app Alipay and its local e-wallet partners had about 900 million annual active users in China and 1.2 billion globally as of June, according to Bloomberg Intelligence.


Category: Singapore

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