iFAST: Don’t bank on it!

iFAST has a 1 in 7 chance to become a digital bank. Here’s why. 

iFAST is one of the nine bidders who made the shortlist for the Singapore wholesale digital banking license and only three licenses will be awarded by end-2020.  iFAST is up against bidders which are partly owned by the Singapore government and the largest Chinese Internet companies.

Here are a few bidders who probably made it to the shortlist:

  1. Ant Financial: Temasek and GIC are minority investors in Ant Financial while Ant Financial operates a digital bank in Hong Kong.
  2. Sheng Ye Capital consortium, which includes Phillip Capital and Advance.AI: Phillip Capital and Advance.AI are partly owned by Temasek’s Pavilion Capital.
  3. AMTD consortium which includes Xiaomi, SP Group and Funding Societies: SP Group is wholly owned by Temasek.
  4. ByteDance: Bytedance investors include Softbank, KKR and Sequoia. ByteDance is private but is rumored to be valued at USD100 billion 

See what I mean? It’s going to be a tough fight. Ant Financial and Sheng Ye will probably get two of the licenses. Let’s call it a 1 in 7 chance that iFAST gets the last license. 

iFAST has several strengths. First, they have a track record in developing a profitable and growing fintech platform with almost SGD10 billion of assets under administration. Furthermore, iFAST has impressive partners for its digital banking bid which includes Yillion, a Chinese digital bank and Hande Group who is led by Dr Cao Tong, the former president of WeBank, the first digital bank in China.

In short, iFAST has a chance to win but don’t bet everything on it. iFAST’s share price charged up 14% this week after the company was shortlisted for a Singapore digital banking license. If you buy more shares, please pace yourself! 

 

 

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