China tech firms circle Singapore banking sector, includes digibank tied to Meituan Dianping

CHINESE tech firms are edging into Singapore's banking sector, with top names throwing their bids in for digital wholesale bank licences here.

This comes as on Friday, mainboard-listed iFast Corporation announced that it has led a consortium with two China partners to apply for a Singapore digital wholesale bank licence.

These partners are Yillion Group and Hande Group, the fintech firm said in a regulatory filing before the market opened.

Yillion Group operates one of four digital banks in China and counts China's Meituan Dianping - which is listed in Hong Kong - as one of its key shareholders.

Meanwhile, Hande Group is a China fintech company founded by Cao Tong, the former president of Webank - China's first digital bank.

Lim Chung Chun, iFast chairman and CEO, said a digital banking licence will allow the company to bring solutions to the small and medium-sized enterprises (SME) market that has been underserved by banks.

"We believe that there is currently a big opportunity in Singapore for a new bank to become the 'bank of choice for SMEs', particularly for loans," he said.

Mr Lim added that an iFast-led digital bank will be able to tap Singapore's growing role as a leading wealth management centre.

One of iFast's shareholders is Singapore Press Holdings (SPH) - which publishes The Business Times. SPH's subsidiary SPH Invest holds a 15.21 per cent stake in iFast as at March 8, 2019, according to the fintech firm's annual report for 2018.

As at 10.05am, iFast shares were trading 1.9 per cent or two Singapore cents higher at S$1.06, after the announcement was made.

iFast's Chinese partners join Jack Ma's Ant Financial and Tiktok's owner ByteDance Technology in their keen interest to tap the underbanked SMEs in Singapore.

A digital wholesale bank licence will allow the successful licensee to serve SMEs and other non-retail segments. This is unlike digital full bank licences which will allow the licensee to take deposits from retail customers and provide a wide range of financial services.

Bloomberg on Thursday reported that Ant Financial is eyeing a wholesale digital banking licence. A spokesman had told Bloomberg that the Chinese giant aims to contribute "to the development of the digital banking landscape in Singapore". Ant Financial did not respond to BT's email requesting comment by press time.

Meanwhile, China's ByteDance, which owns the popular video-sharing app TikTok, is said to have applied for a wholesale digital banking licence in Singapore, BT understands.

ByteDance is said to be world's largest tech startup with a reported valuation of more than US$75 billion as at 2018. It had earlier signalled intentions to go into financial services.

The South China Morning Post reported that in late 2018, the firm filed for trademarks in China, including one that was categorised under the business of insurance and financial services. ByteDance declined to comment when contacted by BT.