Search

Singapore's digital bank license winner says it's not trying to bring down established banks - CNBC

SINGAPORE — Singtel, as part of a consortium, has just obtained one of Singapore's first digital banking licenses — but the telecom company's entrance into the sector is not aimed at bringing down established banks, an executive told CNBC on Monday.

The company, which is Singapore's largest telco, applied for the license with ride-hailing and payments firm Grab. The consortium became one of four successful applicants, and its license will allow it to take deposits and offer banking services to retail and corporate customers, financial regulator Monetary Authority of Singapore announced on Friday.

Singtel's headquarters in Singapore.
Roslan Rahman | AFP | Getty Images

"We're coming in not like your typical fintech start-up trying to bring down the, you know, incumbent banks," Arthur Lang, chief executive of Singtel's international business, told CNBC's "Squawk Box Asia" on Monday.

Singtel's stock jumped by around 5.6% on Monday morning, while shares of all three Singapore-listed banks declined. United Overseas Bank — the smallest of the trio — fell by 1.5%, while DBS Group Holdings and Oversea-Chinese Banking Corp dipped by around 1.3% and 1.1%, respectively.      

Unlike in many markets, established banks in Singapore — a major Asian financial center — have "successful" digital businesses of their own, said Lang. That makes the banks "very strong and formidable" competitors to reckon with, he added.

However, the new entrant can offer "unmet" banking needs in Singapore and the region, said Lang. He explained that lockdown measures as a result of the Covid pandemic has shifted many activities online, and people now realize it's much more convenient to make banking transactions digitally.

We're coming in not like your typical fintech start-up trying to bring down the, you know, incumbent banks.
Arthur Lang
Singtel CEO, International

Singapore's regulator said it expects the new digital banks to start operations from early 2022. Lang said the Singtel-Grab consortium aims to fill around 200 roles by end-2021.

'Limited' threat to banks

The new entrants should pose "limited" threat to the traditional banks, said Krishna Guha, an equity analyst from investment bank Jefferies. Guha said in a Monday note that he's maintaining his positive view for the Singapore banking sector, with "buy" ratings for OCBC and UOB, and a "hold" rating for DBS.

Piyush Gupta, chief executive of DBS, said the bank — the largest in Singapore and Southeast Asia by assets — is "in a position to hold our own."

"The Singapore banks have been down the digital path now for several years, and I like to believe that we have one of the best digitally banked markets in the world," he told CNBC's "Squawk Box Asia" on Monday.

"There's almost no segments in the market which are underbanked or that we don't touch," he said, adding that DBS has managed to reach "niche spots" such as the older Singaporean population and micro-businesses, even through the pandemic.

Still, Gupta said he's always "wary" of competition and will watch with "a careful eye" for what the new entrants will bring to the industry.

Let's block ads! (Why?)

Article From & Read More ( Singapore's digital bank license winner says it's not trying to bring down established banks - CNBC )
https://ift.tt/33KGm2P
Business

Bagikan Berita Ini

0 Response to "Singapore's digital bank license winner says it's not trying to bring down established banks - CNBC"

Post a Comment

Powered by Blogger.