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Miguel Cordon · · 4 min readTonik interest income triples in 2023, eyes cash flow breakeven by next year
Singapore-based Tonik Financial is an early mover in the Philippines’ neobanking space, being the first one to secure a license from the country’s central bank.
While the company is still loss-making, Tonik says it aims to be the first digital bank in the country to become profitable. This is even as it faces a slew of competitors that have joined the fray since its 2021 launch, with investors having poured over US$700 million into the sector.
The prize? A market where digital banks are expected to generate around US$2.2 billion in net interest income by the end of the decade.
Tonik founder and CEO Greg Krasnov / Photo credit: Tonik
3x growth in interest income
Tonik more than tripled its total interest income in 2023 to US$19.9 million compared to the prior year. In contrast, interest expense only grew by 6% over the same period.
As a result, its net interest income was US$12.6 million in 2023, compared to negative US$0.7 million the year before.
Meanwhile, total expenses widened by a smaller margin compared to revenue, narrowing the company’s losses before income taxes for the year, which stood at US$29.6 million.
Greg Krasnov, the founder of Tonik, tells Tech in Asia that throughout 2023, the bank achieved profitability in all three of its consumer lending product lines in the Philippines. These include salary loans, cash loans, and shop installment loans.
In 2023, Tonik took steps to bolster its shop installment loan offerings. These included partnerships with home appliance retailers in the Philippines like Home Along and FC Home Center.
“This enabled us to start profitably scaling our loan portfolio,” Krasnov says.
Tonik had momentum going into 2023, with the company announcing its acquisition of TendoPay’s Philippine business in December of the previous year.
The move bolstered Tonik’s portfolio of offerings by integrating payroll-enabled financial services into its operations. These include purchasing loans, emergency cash loans, and virtual cards.
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The digibank achieved profitability in all three of its consumer lending product lines in the Philippines, its CEO Greg Krasnov says.
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