iFAST posts net loss of S$2.69m in Q2 on impairment allowance

FINTECH platform iFAST Corp on Saturday (Jul 23) reported a net loss of S$2.69 million for Q2 2022, reversing from a net profit of S$7.02 million a year ago. It was weighed down by a one-time impairment allowance following the restructuring of its India business.

Total revenue was 5.8 per cent higher at S$53.91 million, and included an initial contribution of S$3.92 million from iFAST Global Bank in the United Kingdom.

Its associate company iFAST India Holdings has decided to exit its onshore platform service business in India to focus on delivering global fintech solutions. As a result of the restructuring, iFAST Corp has provided a one-time estimated impairment allowance of S$5.2 million.

Net revenue, which is the revenue earned by the group after deducting commission and fee expenses as well as interest expenses, was 13.3 per cent higher year-on-year at S$29.86 million, the company highlighted, even as the global financial markets went through turbulence. Loss per share for the quarter under review worked out to 0.92 Singapore cent, compared to an earnings per share of 2.54 Singapore cents in the corresponding quarter a year ago.

The directors declared an interim dividend of 1.10 Singapore cents per ordinary share, unchanged from a year ago. The dividend is payable on Aug 17.

The group’s assets under administration (AUA) declined 5.1 per cent quarter-on-quarter to S$17.68 billion as at Jun 30, although on a year-on-year basis, AUA edged up 0.8 per cent. iFAST said: “A broad decline in the value of investment products has offset positive net inflows of S$0.59 billion and S$1.26 billion in Q2 2022 and H1 2022 respectively.”

For H1 2022, net profit slid nearly 81 per cent year-on-year to S$3.04 million, while total revenue was about flat at S$106.84 million. Net revenue was 6.1 per cent higher at S$58.41 million.

iFAST expects overall revenue to continue to grow this year, but warned that net profit will see a substantial decline. It said: “This happens as the group incurs an impairment charge for the India business, initial operating losses for iFAST Global Bank and an increase in its overall operating expenses, which grew 22.3 per cent year on year to S$22.33 million.”

Beyond 2022, the group sees an “accelerated growth momentum” from 2023 for its business, and expects revenues and profitability to reach new highs in 2023 as its ePension division starts to contribute more significantly from Q3 2023 onwards.

In an update on iFAST India, iFAST said that its 41.5 per cent owned associated company decided to pivot to fintech solutions after the Securities and Exchange Board of India announced the discontinuation of the usage of pool accounts for mutual fund transactions, starting Jul 1.

It added: “This new regulation has fundamentally undermined the ability to provide efficient online platform services to clients, advisers and business partners in India, and (it) has decided to exit its onshore platform service business.” India-incorporated iFAST Financial India (IFI) — in which iFAST holds a majority stake via iFAST India — “continues to explore new opportunities and will focus on the provision of global Fintech solutions by leveraging on the expertise of the iFAST group”.

Shares in iFast closed 1 Singapore cent, or 0.25 per cent, lower at S$3.99 last Friday.