iFast Q2 net profit down 16.5% to S$2.45m

MAINBOARD-LISTED fintech firm iFast Corporation reported net profit of S$2.45 million for the second quarter ended June 30, 2019, down 16.5 per cent from S$2.94 million in the year-ago period, in a results release on July 27.

iFast said the fall in net profit "was because of the continuing investments that the group has put into its platform capabilities, particularly in the IT fintech capabilities". Operating expenses, excluding iFast's China operation, rose 18 per cent due mainly to efforts such as improving the range of investment products and services, said iFast.

Revenue dipped 0.9 per cent to S$30.6 million from S$30.9 million in the year-ago period. iFast attributed this to lower front-end commission income, as customers' investment subscription in unit trusts fell amid weak investor sentiment.

While revenue from iFast's business-to-customer segment rose 9.4 per cent to S$5.17 million, revenue from its larger business-to-business segment fell 2.8 per cent to S$25.5 million.

Earnings per share for the second quarter was 0.91 Singapore cent, compared to 1.1 Singapore cents in the year-ago period.

iFast has declared an interim dividend of 0.75 Singapore cent per ordinary share.

iFast noted that "despite volatile financial market conditions and generally jittery investor sentiments in Asia" in the first half of 2019, the group's assets under administration grew 12.2 per cent year-to-date, from S$8.05 billion at the start of 2019 to a record high of S$9.04 billion at the end of the first half.

Record AUA levels were reached in Singapore, Hong Kong, and Malaysia, although tough financial market conditions and a changing regulatory environment meant a slower performance for the China business.

iFast also reiterated its interest in pursuing a digital bank licence in Singapore, after the Monetary Authority of Singapore recently announced plans to issue up to five digital bank licences to non-bank players.

iFast said it "is in talks with potential partners for the upcoming application", adding that it "believes that it has some natural strengths to perform digital banking as it is one of the few fintech firms in Singapore with the track record of running a profitable regulated business handling large amounts of retail monies and assets".

But it noted that there is no assurance that it will be successful in its upcoming application. If successful, the licence will allow iFast to provide cash management and related wealth management services to companies in the digital economy, including payment and e-commerce players.

iFast shares closed up one Singapore cent, or 0.91 per cent, at S$1.11 on Friday before Saturday's results release.