iFast to continue working on scale, quality of platforms across markets for B2B and B2C segments: CEO
IFAST Corporation AIY is looking to get "bigger and better" over the next 4 years, and will continue to work on enlarging its overall fintech ecosystem for both the business-to-business (B2B) and business-to-customer (B2C) segments, said chief executive Lim Chung Chun.
In a call to discuss the company's financial results for the fourth fiscal quarter ended December 2021, Lim on Tuesday (Feb 15) said that one of the focus points for the group will be to ensure that its business model is scalable, capital efficient and gets a majority of net revenue from recurring income.
One of the ways iFast will do this is to add other capabilities to its suite of offerings to ensure that the group remains "a progressive and competitive fintech player" and to improve "overall user stickiness".
"We believe that fintech businesses in most countries around the world are still in the early stages of growth," said Lim, adding that iFast needs to "look forward and invest accordingly".
He cited the example of the company's acquisition of a majority stake in BFC Bank - a fully licensed UK bank operating under the Financial Services Compensation Scheme - in January. While the acquisition will cause the group to book a S$4 million loss anywhere from Q2 to Q4 this year, Lim said the bank should achieve profitability in 2024.
This acquisition, he stressed, is an example of iFast getting into a service that is "adjacent to wealth management" and has "a lot of potential". Banks are the "foundation layer" of the financial industry, and having direct access to a bank will help the group innovate and progress at a faster pace.
"Successful fintech businesses need to have the ability to combine the technological capabilities and agility of many fintech startups with several of the strengths of traditional financial institutions," he said.
But the demand is strong. Lim said investors from many markets will be looking for the best wealth management platforms across the world that can provide "a seamless access and connectivity to global products and global exchanges". Attractive deposit rates are an added advantage, he said.
iFast on Monday posted a 5.5 per cent rise in net profit for Q4 to S$7.2 million from S$6.8 million in the corresponding year-ago period. Revenue was up 13.9 per cent to S$54.6 million.
For the full FY2021, iFast's earnings were up 44.8 per cent year on year to S$30.6 million, while top line was up 27.2 per cent to S$216.2 million.
The board of directors have proposed a final dividend of S$0.014 per share, an increase of 40 per cent on year from the previous final dividend.
iFast, which was among Singapore's top performing stocks in 2021, appears to have many things going for it. But some of its ventures may not necessarily be successful, and investors should be prepared.
For instance, the company is pursuing a Malaysian digital bank licence. Having lost out on its bid for a digital wholesale bank licence in Singapore, Lim warned that investors should now start to "factor in the possibility" that iFast will not be successful in its Malaysia digital banking licence application.
iFast expects its overall business to achieve robust growth in both revenue and profitability between 2021 and 2025, with Hong Kong's ePension division expected to be the biggest driver from 2023.
Among iFast's Asian markets, Hong Kong was one of those that was a victim of weak investor sentiments in Q4, due in part to the concern of defaults in Chinese property bonds. But looking ahead, Lim said iFast expects to "substantially accelerate" the growth of its overall Hong Kong business over the next 4 years.
The ePension division will not add to the group's assets under administration (AUA) figures, but will give the company a strong stream of recurring service fees, said Lim.
As at 12.06 pm, shares of iFast are trading at S$6.06, down 1.9 per cent or S$0.12.
