SG digibanks spend big for 2022 launch, filings show (Update)

Photo credit: GXS Bank

As Singapore’s digibank space heats up, first movers Trust Bank, GXS Bank, and MariBank have spent big in their first few months of operations.

Trust Bank, which launched on September 1 last year, logged S$124.7 million (US$92.9 million) in operating expenses for 2022, according to its financial statements. A representative told Tech in Asia that the amount was mostly invested in the tech, talent, risk management, and compliance needed to set up the digibank, which is backed by Standard Chartered and FairPrice Group.

GXS Bank, a joint offering from Grab and Singtel, launched shortly after Trust Bank. According to its financial statement, the company set aside S$136.2 million (US$101.4 million) in operating expenses last year, with slightly over half going to staff compensation.

A later entrant to the race is MariBank, which is backed by Sea Group. The bank’s later launch meant it spent much less in 2022 than its competitors, only incurring US$31.3 million in expenses last year.

As expected, revenues for all three banks are still minimal compared to expenses. Trust Bank recorded US$3.6 million in net interest income, with GXS Bank at US$1.8 million and MariBank at negative US$327,000.

However, a representative for MariBank told Tech in Asia they will be “inviting more individual users and SMEs beyond our ecosystem” over the coming months.

Tech in Asia has reached out to GXS Bank for comment.

Big investment, big return?

For Trust Bank, the investment appears to have paid good dividends so far. The bank’s spokesperson said that within seven months after its launch, the bank onboarded more than 500,000 customers – about 10% of the Singapore market.

As of May this year, the bank had crossed US$744.7 million in deposits. According to its 2022 financials, it hit US$477 million in deposits of non-bank customers.

“Trust aims to become Singapore’s fourth largest retail bank by customer numbers by the end of next year and to break even in 2025,” the person added.

Meanwhile, GXS Bank officially opened its virtual doors on September 5 last year, positioning itself as the “Gen Z bank.” However, the digibank quickly hit a wall with its services.

In Singapore, digital full banks – the category GXS Bank falls under – can only accommodate a maximum of S$50 million (US$37.5 million) in deposits in their initial phase of operations. In contrast, Trust Bank has a full bank license, which gives it a higher threshold.

However, there are signs that GXS Bank is expanding its services. Last month, the digibank increased its maximum deposit amount for savings accounts from S$5,000 (US$3,772) to S$75,000 (US$56,575) per account, signaling a higher cap.