Grab consortium, Sea among five winners of Malaysia digital bank licences

Photo: Grab

A Grab Holdings-backed consortium and a group involving Sea Ltd. were awarded licences to operate digital banks in Malaysia, according to an announcement by the country’s central bank on Friday. 

GXS Bank — Grab’s digital bank joint venture with Singapore-listed telecom operator Singtel — will hold a 55.45% stake in the proposed Malaysia digital bank. GXS Bank’s successful bid involves Malaysian investors including  Kuok Brothers, part of tycoon Robert Kuok’s Kuok Group.

The bank will be led by Pei Si Lai, a financial services industry veteran with over 25 years of experience. “Ms. Lai has been appointed as CEO designate and will form a dedicated team that aims to redefine banking for the estimated one in two Malaysians who are underserved or unbanked,” said Grab in a statement.

Sea’s bid included a unit of YTL Corp., a Malaysia-based conglomerate controlled by tycoon Francis Yeoh.

Other successful applicants included:

  • a consortium of Boost Holdings Sdn Bhd and the Malaysian lender RHB Bank Berhad;  
  • a consortium of AEON Financial Service, AEON Credit Service Berhad, and MoneyLion;
  • a consortium led by KAF Investment Bank Sdn Bhd.

Boost is the fintech arm of Axiata Group Berhad, while RHB Bank Group is a local financial services company in Malaysia. The two entities announced their partnership to bid for the digital bank licence in June last year. Boost owns 60%, while RHB owns the rest in the digital bank.

“The digital bank will be a catalyst for greater financial inclusion and aligns with our mission to financially empower and support users and merchants,” said Sheyantha Abeykoon, Group CEO of Boost in a statement.

The fintech firm said it has laid the groundwork for a digital bank through its lending business Boost Credit. Through this it has developed a core customer base with deep data-driven insights to solve the pain points of the financially underserved population.

The bid for a digital banking licence in Malaysia started last July. The winners were selected out of 29 applicants from tech firms, conglomerates, banks, as well as e-commerce and fintech operators.

The successful bidders will be able to provide banking services to retail customers as well as small and medium enterprises (SMEs), including those who are underserved by traditional banking and financial institutions.

Bank Negara Malaysia expects the new digital banks to start operations in 2023.

Digital banks are on the rise in Southeast Asia. In 2020, Grab and Sea Ltd were granted separate digital banking licences in Singapore.

Sea Ltd is also strengthening its banking presence in Indonesia as it plans to acquire a minority stake in PT Bank Mayora from its controlling shareholder Bank Negara Indonesia. In 2021, Sea had acquired Bank BKE and transformed it into a digital bank — Seabank.

Meanwhile, Grab and Singtel acquired a minor stake in Indonesian local lender Bank Fama to join the digital banking fray.

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