Singtel may commit over $440m to digital bank venture with Grab

A pedestrian walks past a Singapore Telecommunications Ltd. (SingTel) store in Singapore, on Monday, Feb. 29, 2016. Photographer: Nicky Loh/Bloomberg

Singapore Telecommunications Ltd. might have to commit more than S$600 million ($440 million) to its joint venture with Grab Holdings Inc. that wants to start a digital bank in Singapore, according to DBS Group Holdings Ltd.

The venture “is a strong candidate for a full digital banking license,” DBS analyst Sachin Mittal wrote in the report published Tuesday. Singtel may need to make the investment over the “long term,” he said.

The Monetary Authority of Singapore plans to award as many as five permits by the end of this year, including two for full digital banks for consumers — the category that the Grab-Singtel venture has applied for.

The Grab-Singtel consortium has the potential to win a 2% to 4% share of the local consumer market excluding mortgages in five years, and may break even over a similar time frame, Mittal said. Singtel, majority-owned by state-owned investor Temasek Holdings Pte., should be able to build trust among its customers and take in bank deposits, he said.

A spokeswoman for Singtel declined to comment.

Grab holds a 60% stake in the digital bank venture, and the remainder is owned by Singtel. The group hired Charles Wong, a 20-year veteran at Citigroup Inc. in Singapore, for the venture earlier this year.

Other contenders for the full-bank permits are Sea Ltd., which is backed by Tencent Holdings Ltd., a consortium led by Razer Inc., another involving V3 Group Ltd., and a venture between Singapura Finance and Matchmove Ltd., according to the report.

Singtel has a subscriber base of 4.3 million as of June while Grab has more than 187 million users across Southeast Asia, according to DBS.

Bloomberg

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.