AMTD, Xiaomi gun for digibank licence with SP Group, Funding Societies

Singapore

HONG Kong financial services group AMTD Group has linked up with some prominent Singapore names as well as a familiar partner - Chinese tech giant Xiaomi Corp - to vie for a digital wholesale bank licence in Singapore, BT understands.

AMTD is leading a consortium comprising Xiaomi, peer-to-peer lending platform Funding Societies and Singapore's leading utilities provider SP Group that's seeking one of three digital wholesale banking licences up for grabs here.

In an interview with The Business Times late last year, AMTD chief executive Calvin Choi had signalled AMTD's interest in applying for a wholesale banking licence. He said the firm can tap on Xiaomi's expertise on IoT (Internet of Things) and existing tool sets to jointly offer data-driven financial services.

The interest also comes as the financial services firm had jointly secured a virtual banking licence with Xiaomi in Hong Kong last year.

Mr Choi had told BT that the group is "very interested" in Singapore, seeing the Republic as a regional gateway to the other Asian markets.

"We see this digital bank licence as a great opportunity to serve more Asian customers," he told BT in October last year.

"If we have a digital bank in Singapore, we can join the dots, connect both banks (in Singapore and Hong Kong) to offer a more comprehensive suite of financial services to the rest of Asia." He added then that AMTD would be seeking out partners to apply for the licence here.

Xiaomi, a well-known Chinese manufacturer of affordable household appliances, adds to the growing list of Chinese wholesale banking applicants in Singapore's digital banking race, which includes Jack Ma's Ant Financial and ByteDance, owner of video-sharing app TikTok.

Meanwhile, Singapore's SP Group may be able to offer expertise in the area of sustainable finance, going by its latest push into green energy. The proposed digital wholesale bank, with SP Group as a partner, can be expected to back green projects such as the installation of solar panels.

As greater attention turns towards green finance amid rising concern over climate change, this proposed banking entity may also offer services such as the sale of renewable energy certificates, or in financing low-carbon projects.

Funding Societies, which has been in operations since 2015, has expanded beyond Singapore into Malaysia and Indonesia.

As at January 2020, it had facilitated just over S$1 billion in loans. The default rate for loans matched by the Singapore-headquartered peer-to-peer lender stands at 1.24 per cent, its website showed.

In 2018, Funding Societies raised a series B round of US$25 million, led by Softbank Ventures Korea, along with existing investors Sequoia India, Alpha JWC Ventures (Indonesia) and Golden Gate Venture. That funding round also brought in new investors Qualgro and LINE Ventures.

The Monetary Authority of Singapore will, by the middle of this year, issue up to three digital wholesale bank licences alongside up to two digital full bank licences that will permit the taking of retail deposits.

Successful applicants for a digital wholesale bank licence will be able to serve SMEs and other non-retail segments. There is a capital requirement of S$100 million, and foreign entities are allowed to take a majority stake.