S&P Global Market Intelligence believes digital banking contenders Sea and the Grab-Singtel consortium are the most likely to gain coveted digital bank licences in Singapore.
E-commerce platform Sea and the consortium of Grab-Singtel are the forerunners of the seven contenders to gain Singapore’s coveted digital bank licences, according to a ratings agency.
According to a report from S&P Global Market Intelligence, the Sea and Grab-Singtel bids appear to ‘most comfortably’ fulfil regulator requirement for the licences.
Singapore’s regulators have instituted a timeline that includes prospective digital banks to have a capital adequacy of SGD 1.5 billion (USD 1.1 billion) by the fifth year of operation.
The S&P report cited Grab’s successful ride-hailing market as making it more likely to make capital adequacy requirements.
Sea, meanwhile, has gained strong market share in South East Asia. Last year, its shopping platform, Shopee, accounted for nearly 25% of the combined gross merchandise value in Singapore, Malaysia, Thailand, Indonesia, the Philippines and Vietnam.
All at Sea
Amongst the two full digital bank applicants, S&P underlined a greater lending outlook for Sea due to higher average transaction values compared to Grab’s ride fares.
According to the S&P, the average transaction size in the third quarter of 2019 was USD 14.31 at Sea compared to Go-Jek’s USD 4.50.
With a bank licence, Sea would be able to obviate some of the issues inherent in e-commerce, for instance issuing … [read more]