Singtel, Singapore’s largest mobile operator is advancing with its project to start a digital bank together with Grab, the multinational ride hailing company.
Sichin Mittal, Singapore based DBS bank analyst says this joint venture looks like “a strong candidate for a full digital banking license.”
Monetary Authority of Singapore, which is a central bank and financial regulatory authority of Singapore is looking forward to award two full licenses for consumer digital banks.
Grab currently holds a sixty percent stake in the joint venture; Singtel may have to commit over six hundred million Singapore dollars to the digital bank in the long term.
The joint venture by Singtel-Grab would unite two companies with large regional user bases, both headquartered in the island city-state.
The new bank has the potential to win a 2-4% market share in Singapore’s banking sector, If it can secure a license, says Mittal.
Singtel has more than 4.3 million mobile phone subscribers, while Grab has more than 185 million users.
Temasek Holdings being the parent company of Singtel. Grab is backed by SoftBank.
Because of Covid-19 lockdown, revenue has fallen down for both the companies.
Singtel customers relied on Wi-Fi as they stayed indoors, because of Singapore’s lockdown measures, mobile service revenues have fallen down.
Corona chaos hits Singtel, Grab
Its operating revenue in its Singapore consumer division fell by 22% year-on-year.
Three sixty employees of Grab were laid off, as Singapore’s lockdown restrictions hit the ride-sharing industry.
Singapore government’s lockdown measures have paid off as COVID-19 infections have reduced drastically.
Sea, an online gaming company which is backed by China’s Tencent is currently Singapore’s most valuable publicly listed company, is applying for a license as well.
With COVID-19 continuing the potential wreak on Singtel’s telecom and Grab’s ride-sharing revenues, a side hustle in the banking scene might just seem all the more attractive.
