The owner of Ant, Grab and Shopee wins digital banking licenses in Singapore

Four digital banking licenses have been granted today by the Monetary Authority of Singapore. (Photo Reuters)

SINGAPORE: Jack Ma’s fintech Ant Group Co, a company led by Grab Holdings Ltd, and online gaming company Sea Ltd, which also owns Shopee, have won licenses to run digital banks in Singapore.

A consortium involving China’s Greenland Financial Holdings Group Co was among the four winners announced today after nearly a year of deliberation by the Monetary Authority of Singapore (MAS).

Singapore is joining the UK and Hong Kong to open up its banking system to purely digital entrants as it strives to inject innovation and competition into a market dominated by traditional lenders.

The permits are coveted given the city’s status as a fast-growing asset management center and a gateway to Southeast Asia, where the digital lending market is expected to quadruple within five years.

Digital full banks are allowed to take deposits and provide banking services to both retail and corporate customers. Digital wholesale banks can only target small and medium businesses and other non-consumer segments. They are expected to start in early 2022, MAS said.

MAS said it had decided to grant licenses to two wholesale applicants who met its expectations and were demonstrably stronger on all criteria. MAS had previously said it would issue as many as three wholesale licenses.

As the digital wholesale banks “are introduced as a pilot project, MAS will consider whether more such licenses will be granted in the future,” he said. The authority also said it had taken into account the impact of Covid-19 on applicants’ business plans and projections.

The participants will provide new competition for lenders such as DBS Group Holdings Ltd.

While more than 90% of Singapore’s adult population has bank accounts, the newcomers are likely targeting segments such as unsecured personal loans and small and medium businesses that may not have good access to finance.

For Ant, the successful offer could ease the pain it is experiencing in its home market of China after a series of regulatory measures derailed its long-awaited initial stock sale. The company, co-founded by billionaire Jack Ma, has a slim chance of reviving its IPO in 2021 as China overhauls rules for the fintech industry, according to regulatory officials familiar with the matter.

Grab is partnering with Singapore Telecommunications Ltd on its digital bank, through a majority shareholder. Grab was founded in 2012 by Anthony Tan and Tan Hooi Ling as a taxi service and has been providing certain financial services to consumers and merchants for over a year. It has expanded its offering to include products including fixed income funds from Fullerton Fund Management and UOB Asset Management.

Sea is the most valuable company in Southeast Asia with a value of approximately $ 90 billion. Chinese-born Singaporean entrepreneur Forrest Li founded the online gaming company in the city-state in 2009 before going public in New York in 2017, after which it added an e-commerce platform, Shopee.

Greenland Financial is the investment arm of state-owned Chinese real estate developer Greenland. The consortium includes Linklogis Hong Kong Ltd and Beijing Co-operative Equity Investment Fund Management Co.

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