Malaysia’s remaining digibanks prep for a late arrival

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Hi readers,

The mad dash to meet deadlines is an everyday experience for almost all of us. Digital banks are not exempted.

Two of Malaysia’s digital bank consortia — one led by KAF Investment Bank and the other being YTL-Sea — are looking to launch their digital banks in October, sources tell me. And these parties — the last two that have yet to launch among those approved for a license by Bank Negara Malaysia — are going live after reported delays.

To be sure, they have until the end of the year to make good on their pledges to launch their respective digital banks.

Competition is fierce. GX Bank, Aeon Bank, and Boost Bank are already jostling for market share. GX and Aeon are the talk of the town, as both have pushed out competitive daily interest rates, and more importantly, have money to burn.

GX is backed by Grab, Singtel, and Malaysian conglomerate Kuok Brothers. Aeon Bank, on the other hand, is controlled by Japanese conglomerate Aeon.

The biggest test for all these digital banks, aside from maintaining a certain level of capital, is to reach the unbanked. This is where things will get dicey, as digital banks will have to deal with non-performing loans, among other problems.

My pick? I have always seen Aeon as a strong contender. Why? The firm has a presence in cities and towns outside the Klang Valley through its chain of hypermarkets and retail malls.

And in each of these malls there’s a credit or lending service. Aeon Credit, a Bursa-listed company, has maintained a non-performing loan ratio of 2.46%.

More importantly, it lends to the underbanked, especially those seeking budget motorcycle loans, a segment that even used-car platforms shy away from.

— Emmanuel Samarathisa, journalist at Tech in Asia

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Image credit: Timmy Loen

1️. After setbacks, Malaysia’s 2 remaining digibanks eye October launch: sources
Both the KAF consortium and YTL-Sea are still working to meet the central bank’s requirements beyond the April 2024 deadline.

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