iFast eyes growth opportunity in underserved mass-market banking segment

[SINGAPORE] Wealth platform iFast is eyeing significant potential in serving and banking mass-affluent and retail customers, said group CEO Lim Chung Chun at the company’s third-quarter results briefing on Tuesday (Oct 27).

“The world has changed, and the banking business will change as well,” he said, adding that this presents an opportunity to offer customers a wealth-management and digital banking platform globally.

While global banks focus on high-net-worth clients, the under-served mass-affluent and retail segments offer iFast its best growth potential with the least competition, he said.

On Monday, iFast announced a 24.5 per cent rise in Q3 net profit to S$32.4 million, from S$26 million previously. Earnings per share for the quarter ended Sep 30 stood at S$0.1056, up from S$0.0856 a year earlier.

Together with the Q3 dividend of S$0.032 a share, iFast expects to pay out a total dividend of S$0.12 a share for the year.

The company anticipates the two main divisions – personal banking and business banking – of its banking business to expand, from a current deposit base of about S$2 billion to a target of around S$15 billion by 2030.

Despite this reflecting substantial growth for iFast, Lim added that this represents a relatively small share of the deposits held by Singapore’s major banks, at around 3 per cent.

As it grows, iFast is not looking for a high loan-to-deposit ratio, he said, noting that its current ratio is in the high teens, and keeping the ratio moderate would help the bank maintain liquidity if deposits fluctuate.

He expects that this will grow to above 20 per cent by year-end and is being planned at around 30 per cent for next year.

With the bank still in the initial years of profitability, Lim noted that he expects that the ramp-up can be quite rapid, adding that the current cost to income is around 80 per cent now.

“By 2030, in our scenario planning, if we can achieve a deposit base of S$15 billion… we should be targeting a cost-to-income ratio of 35 to 40 per cent at that point of time,” he said.

Building a global platform

For its multi-currency debit-card service, iFast is expanding beyond the UK to seven markets: Hong Kong, Singapore, Thailand, Malaysia, Taiwan, Pakistan and Germany.

Singapore accounted for about 68.7 per cent of the group’s assets under administration (AUA), followed by Malaysia and Hong Kong. The group’s AUA reached a record S$36.76 billion in Q3, up 20 per cent year on year.

Following the launch of the company’s first exchange-traded funds on the Singapore Exchange in partnership with Xtrackers by DWS on Oct 1, Lim noted that the ETF market is growing very strongly globally.

The company plans to work with fund managers, drawing on their products and expertise, while using iFast’s distribution capabilities to continue growing in this space.

Meanwhile, AUA in Malaysia grew by almost 30 per cent year on year, with revenue from IT development contributing, though underlying revenue and profit growth remained strong even excluding that contribution.

AUA in China was up more than 50 per cent year on year, with losses in the business narrowed.

Another key market for iFast is Hong Kong, where the platform has located not just wealth management, but also its e-pension business.

The company said that headcount peaked around mid-2026, and staff costs were flat quarter on quarter in Q3. It expects to improve efficiency over time, but does not plan to make large, premature reductions in resources.

For its Occupational Retirement Schemes Ordinance (ORSO) initiatives, a voluntary, employer-sponsored retirement scheme system in Hong Kong, iFast noted that there has been a delay, and it is now expected to start in the second half of 2027.

Lim attributed the delay to major changes in Hong Kong’s pension industry over the last couple of years, particularly Electronic Mandatory Provident Fund (eMPF) onboarding.

The eMPF business and ORSO initiatives are different segments of the business, but since many of the same industry participants are involved, the company and regulators wanted changes to settle before introducing further changes, he said.

Future growth plans

Lim said iFast’s priority is to maintain a business model that can deliver robust organic growth, but it will consider acquisitions for strategic reasons or where there are opportunities to accelerate expansion.

He cited the 2022 acquisition of a UK bank as a way to enter the banking industry, where obtaining a licence can be difficult.

Earlier this year, iFast also acquired a 30 per cent equity stake in Financial Alliance, which Lim noted was an opportunity to “build a sizeable, growing and listed financial-advisory firm” in Singapore, to strengthen the ecosystem.

“We are of the belief that there can be one, at least one that will be able to do well and (be) big enough to be listed, and will continue to grow.”

He added that the current higher interest-rate environment is generally positive for the bank to support margins and help it attract deposits and scale faster, particularly because traditional lenders often pay little or no interest on current accounts.

As the bank grows and its customer relationships deepen, deposits may become less rate-sensitive and stickier, creating potential to expand margins over time.

For wealth management, the effect of higher rates could be mixed: They may weigh on equity market sentiment, while making bonds more attractive to investors. Lim said that, on balance, a higher-rate environment was likely to be positive for the group.

He added that iFast will continue to target robust growth in 2027, noting that strong growth will come from the banking business, while the wealth-management platform will continue to target growth of over 20 per cent, although a bear market could affect short-term profitability.

“The various growth initiatives have always been there, and that is something that we aim to be able to grow at over 20 per cent per year… we are looking forward to good growth for 2027.”