Tonik targets cash flow breakeven in 2025 as losses narrow

Sometimes, less can be more.

In 2024, Tonik Bank hit pause on a few of its SME loan products and “actively managed down” customer deposits.

Despite this, the Philippines-based digital bank managed to boost net interest income by 44.4% and narrow losses by 26% year on year.

Greg Krasnov, founder and CEO of Tonik / Photo credit: Tonik Bank

Tonik founder and CEO Greg Krasnov attributes this to a significant improvement in credit quality, better lending yields, and the falling cost of funds.

He tells Tech in Asia that Tonik’s primary objective for 2025 is to achieve cash flow breakeven in the next two to three quarters. The firm is also targeting a 70% to 100% year-on-year increase in revenue growth this year.

Managing deposits down

Founded in 2020, Tonik is one of six licensed digital banks in the Philippines. The country is Tonik’s only market for now.

Customer deposits decreased 30% year on year in 2024. Krasnov says that cutting deposits was intentional and done “in anticipation of the reduction” in the treasury rates of Bangko Sentral ng Pilipinas (BSP), the Philippines’ central bank.

When central banks lower their rates, banks earn less interest on their reserves held with the institution. In turn, this discourages banks from aggressively attracting deposits, particularly if they don’t see lending opportunities.

But given its current deposit amount, Krasnov points out that Tonik still has “ample headroom” to expand its loan book this year.

Photo credit: Bangko Sentral ng Pilipinas

Notably, Tonik’s staff costs rose by 2% last year despite layoffs in March 2024, which reportedly affected around 80 employees.

Krasnov says he “didn’t agree” with the media’s characterization of Tonik’s “headcount rebalancing,” noting how the firm has been consistently increasing its staff.

Loans take center stage

Tendo in, Big Loans out

Aiming for double in 2025