Singtel may pour $441m in digital bank JV with Grab, report says

In a note released last week, Citigroup said that the total amount can be delivered over several years instead of all at once. “As such, we don’t believe that the digital bank will materially weigh down on Singtel’s free cash flow or dividend payment potential,” the financial services firm said.

In late 2019, Grab and Singtel announced that they have formed a consortium to apply for a digital full bank license in Singapore. They centered their pitch around catering to the needs of digital-first consumers and small and medium-sized enterprises.

Both DBS and Citigroup also expect that the Grab and Singtel-led team may be one of the favorites in the city-state’s digital bank race. Other contenders include an Enigma Group-led consortium, Razer’s financial arm Razer Fintech, and internet giant Sea, among others.

See Also: Singapore’s digital bank contenders: Who they are and what they bring to the table

DBS analyst Sachin Mittal said that the Singtel and Grab JV has the potential to secure 2% to 4% of Singapore’s consumer market in five years, excluding mortgages. It may also reach break even in four to five years, he added.

The Monetary Authority of Singapore is expected to hand out as many as five licenses before the end of 2020.