iFAST

(30-04-2024, 01:44 PM)money Wrote: i do have a different perspective.

i was wondering why will the average person not go to his/her local banks with a strong local presence (i.e. singaporean will think about dbs, ocbc, uob) and instead choose to bank with this "Global bank"? Is the global bank accepting customers that the local banks dont want?

i also dont see small digital banks compete successfully with incumbent banks. Digital banks dont seem to be able to scale effectively. Say different people from country A, country B, country C...., country Z want to take up loan, i will be skeptical that the small digital bank can underwrite all the loans smartly and efficiently. You will need to train personnel to be familiar with the rules and regulation in different countries, all of these cost money and i would say that small digital banks wont be able to do it effectively

According to the AGM replies, iFast is not intending to move into lending for now. I think they have some margin loans or might want to move into margin loans but right now they are focusing on taking deposits, putting the money into safe money market stuff and earning the spread.

As for this question " Is the global bank accepting customers that the local banks dont want", that is partly correct. the CEO believes that HNWI have access to offshore banking who accept their business, but these banks turn away individuals with 100Ks or so because they are not worth the effort. 

So he believes there is an underserved mass affluent segment which wants these services.

(30-04-2024, 07:36 PM)Curiousparty Wrote:

(30-04-2024, 01:44 PM)money Wrote: i do have a different perspective.
i was wondering why will the average person not go to his/her local banks with a strong local presence (i.e. singaporean will think about dbs, ocbc, uob) and instead choose to bank with this "Global bank"? Is the global bank accepting customers that the local banks dont want?
i also dont see small digital banks compete successfully with incumbent banks. Digital banks dont seem to be able to scale effectively. Say different people from country A, country B, country C...., country Z want to take up loan, i will be skeptical that the small digital bank can underwrite all the loans smartly and efficiently. You will need to train personnel to be familiar with the rules and regulation in different countries, all of these cost money and i would say that small digital banks wont be able to do it effectively

iFast doesn't even need to underwrite loans; they're sticking with a simple, plain-vanilla approach to earning 1 to 1.5%, close to risk-free earnings. Accumulating $15 billion to $20 billion of customer deposits shouldn't be a tall order to achieve in a few years' time, especially with the establishment of an AI center to accelerate the acquisition of new customers. We're talking about 400 headcounts in the center to service customers on this planet Earth!


When the CEO said that iGB would be a major driver going forward from 2025, I took it to mean that he would achieve it, as evidenced by the success of the e-pension project, which came to fruition despite earlier skepticism from the market..

I believe Mr Market would play a "delay-action" catch-up game in terms of pricing iFast correctly. Soon, they would realize that iFast is a massive goldmine with the license to print money, much like USA FED...$1b customer deposit = $1 in share price

How do you think AI will help?

Very good write up!

https://mrtfi2024.com/2024/05/01/ifast-a...-snippets/

iFast has still not entered the hockey stick massive growth period as iGB is still in the initial stages of collecting customer deposits. Hopefully, this point of inflexion will come sooner than expected.


"Hockey stick growth is the growth pattern that a company exhibits where initially there is a stagnant growth, but when a certain point is hit (point of inflexion), growth increases exponentially. Usually, such growth charts differentiate a startup from a small business."

https://www.youtube.com/embed/MPc-IW_5NS...aXtCu_pEdm

iFast AGM ....

Is ifast going to be the Sheng Siong of Global Banking in next decade? Only time will tell...I'm waiting at $50 at least and beyond...
(at $50 share price, MC is only $15b...DBS's MC is ~$100b...OCBC - $65b)

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On your first question about cash flow from an e-pension project, it is true that in the initial months, I think the initial two quarters, three quarters, in terms of cash flow, it is not as strong as what the profitability may suggest. The reason is because in terms of actual payment that we are getting from the project, there is a slight delay in timing, depending on the extent of the work done and so on. But the cash flow part is actually picking up from April onwards, and I think from here on, you are going to find that the cash flow will actually be quite comfortable, and it will be something that will be quite consistent moving on from here.

Second part of the question, the most significant growth driver, for IFAST Global Bank, we have three business divisions. We have the digital personal banking, digital transaction banking, and then we have the EZ-REMIT, which is the remittance business. In our opinion, in my opinion especially, the part that has the biggest potential is the digital personal banking. This is a part of the business where we are looking at being able to attract customers from all over the world, various countries, who open accounts with us and then put some deposits in.

As of today, we have people from 70 countries who have opened accounts with us. The deposit base is actually more concentrated in a few countries. I think about one-third coming from UK residents, but I think the remaining from offshore. But essentially, what we are seeing is that the kind of demand that we are expecting from people to open a bank account outside their home country and then put deposits there, I think that is certainly proving to be true and the demands are coming in.

I think some digital banks tend to burn a lot of money, and when I say a lot, I mean a huge amount to buy the business and so on before the flow comes in. But in our case, we are actually seeing that the natural demand is actually coming in and it shows that the premise that we actually have. When we bought a bank and set up our business division, I think that is something that will most likely happen. So we are looking at that being a big potential.

So from our perspective, we are talking about a bank is actually an institution that allows us to let various customers open an account from different parts of the world and then they put in their cash. And then we collect the deposit and then we make a spread. It doesn't have to be very high, 1%, 1.25%, 1.5%. We take low risk, we keep our balance sheet strategy conservative and then we grow. And how big is that potential?

Well, I think the answer should be quite clear. I think you are talking about collecting deposits from various countries from all over the world.

From my perspective, the sky is the limit in terms of the potential upside. So that is the part where I expect to be the biggest driver going forward. Of course, we are expecting that the other part of the business, the transaction banking, easy remit will grow as well. 

But in terms of the key reason why we bought the bank was personal banking. And that is synergistic with our platform business because some of our customers will open an account with the bank, with IFAST Global Bank, then they are going to find that they can actually transfer some money to a Singapore platform. We make it seamless and then they do their investment with us. And we are seeing the initial signs of some of that benefits actually happening. Thank you. Any further questions?

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Why would customers choose IFAST Global Bank instead of other banks? 

I think the starting point has got to do with the business model. I personally have actually been mentioning to many people that if I take the overall financial sector, the least competitive part of the industry, in my opinion, is actually banking.
If you take stockbroking, for instance, because there are so many stockbroking firms, they compete very aggressively. Our competitors, slash partner, Tiger, Moomoo, and so on, they pay you money to open an account. You put in $3,000, whatever $1,000, and then keep it there for a period of time, and then they give you one free Apple Share just to get the client to open an account. That's how the competitive environment is in stockbroking. That happens because there are many stockbrokers, and because to get a stockbroking license is much easier than getting a license at a bank.

So the banking environment is actually quite different. Banking is still what I call an old boys club. You can be a bank only if you are already a bank somewhere in the world. That is the name of it. So what that means is that in general, the level of competition in banking is not as high. And what it also means is that there are actually quite a number of business models that are in demand, but the existing banks are not keen to do.

So the most obvious one in our case, our example really, is to tap the global flow of money. Actually, the Singapore banks, the Singapore private banks, are tapping into the global flow of money. You have all the high-net-worth individuals opening accounts with private banks here, and then putting lots of money in Singapore. Hundreds of billions of dollars are here. So there is a huge global demand for a bank that allows the client to put the money outside the home country. So that part of the service, you actually find that many banks are providing.

But what they are not providing would be for the non-high net worth individuals. If you don't have a few million, but you only have 100,000 or 50,000 or 20,000, and you want to open an account outside your home country, you actually find that it is quite difficult. It is a painful process. Most banks don't make it easy for you.

A lot of banks, in fact, outright don't allow foreigners to open a bank account. But the truth of the matter is that there is actually strong demand for many people from around the world to open bank accounts outside the home country.

So we are actually catering to that part of the demand, that demand for that service, for massive loan and mass market. And by just being there to provide that service, we believe there is a huge potential for us going forward.

So why do people want to use us for that part of the service? I think there are just very few banks providing that service. The other reason I would like to provide would be for the domestic market, just the UK market itself.

Because cash is a simple product, but you actually find that the banking world is still a business whereby if you are talking about savings account, current account, the banks are actually not passing on too much of an interest rate for overnight money, especially.

So in Singapore we have auto-sweep, so it's basically overnight money, as in you can take out any day and so on. The savings account that you have with DBS and so on, these are actually overnight money. So by and large, generally, banks, most established banks, most of the big banks pay very little for the overnight money, including in the UK. So just on this part, I think for us, as of today we are paying 4.25% for the savings or current account money to the investor, but we are not taking a risk. We have 4.25%, we take 4.25%, we give it to Bank of England, and then we get 5.25%, so we make 1% margin. 

So from our perspective, it's actually good business, but most banks don't pass on much because of, I would say, to a large extent, legacy reasons, traditional reasons. Traditionally, a lot of administrative work to do, they don't like to open an account for a small client, etc. And even when they open, they don't want to pass on too much interest rate. So just for a simple service like that, where you take the cash and pass on a decent interest rate. I think there's a big potential for us to grow from there. So these are just two examples that show that the potential growth for us is actually very substantial.

Does anyone know if other companies post their AGM on Youtube?
I doubt many companies do that. The famous one being Berkshire.

(30-04-2024, 01:44 PM)money Wrote: i do have a different perspective.

i was wondering why will the average person not go to his/her local banks with a strong local presence (i.e. singaporean will think about dbs, ocbc, uob) and instead choose to bank with this "Global bank"? Is the global bank accepting customers that the local banks dont want?

i also dont see small digital banks compete successfully with incumbent banks. Digital banks dont seem to be able to scale effectively. Say different people from country A, country B, country C...., country Z want to take up loan, i will be skeptical that the small digital bank can underwrite all the loans smartly and efficiently. You will need to train personnel to be familiar with the rules and regulation in different countries, all of these cost money and i would say that small digital banks wont be able to do it effectively

the latest AGM verbatim would have shed a lot of light on your comments above. 
Pleasure reading pls.

https://www.theedgesingapore.com/news/ba...4-says-ceo

To Gupta, its wealth management books improved as its customers were beginning to put their money into investment products. The growth was also partly from the low base in the 1QFY2023 from the Credit Suisse impact.

Net new money, which stood at around $6 billion for the quarter, also remained on track to see the same amount of close to $24 billion in FY2022 and FY2023.

“A lot of the money, when they first come in, is through fixed deposits. When the market improves and people’s animal spirits come up, they’re putting their money to work,” Gupta explains.

========


In comparison, iFast net inflow ('net new money") was about ~10% that of DBS at $688mil!
DBS's MC was ~$100bil
iFast MC was ~$2.3bil

(05-05-2024, 10:13 PM)Curiousparty Wrote: https://www.theedgesingapore.com/news/ba...4-says-ceo

To Gupta, its wealth management books improved as its customers were beginning to put their money into investment products. The growth was also partly from the low base in the 1QFY2023 from the Credit Suisse impact.

Net new money, which stood at around $6 billion for the quarter, also remained on track to see the same amount of close to $24 billion in FY2022 and FY2023.

“A lot of the money, when they first come in, is through fixed deposits. When the market improves and people’s animal spirits come up, they’re putting their money to work,” Gupta explains.

========


In comparison, iFast net inflow ('net new money") was about ~10% that of DBS at $688mil!
DBS's MC was ~$100bil
iFast MC was ~$2.3bil

while the same point applies to iFast taking in deposits, what other acquisitions do you think iFast might need to make, in order to become a full service bank like DBS?

Whats the "MC" referring to in your post?

Where is the DBS net inflow that you are comparing iFast's against? Are you referring to the rise in deposits at DBS of about 7 billion?
"iFast net inflow ('net new money") was about ~10% that of DBS at $688mil!"

(07-05-2024, 09:00 PM)EnSabahNur Wrote:

(05-05-2024, 10:13 PM)Curiousparty Wrote: https://www.theedgesingapore.com/news/ba...4-says-ceo

To Gupta, its wealth management books improved as its customers were beginning to put their money into investment products. The growth was also partly from the low base in the 1QFY2023 from the Credit Suisse impact.

Net new money, which stood at around $6 billion for the quarter, also remained on track to see the same amount of close to $24 billion in FY2022 and FY2023.

“A lot of the money, when they first come in, is through fixed deposits. When the market improves and people’s animal spirits come up, they’re putting their money to work,” Gupta explains.

========


In comparison, iFast net inflow ('net new money") was about ~10% that of DBS at $688mil!
DBS's MC was ~$100bil
iFast MC was ~$2.3bil

while the same point applies to iFast taking in deposits, what other acquisitions do you think iFast might need to make, in order to become a full service bank like DBS?

What's the "MC" referring to in your post?

Where is the DBS net inflow that you are comparing iFast's against? Are you referring to the rise in deposits at DBS of about 7 billion?
"iFast net inflow ('net new money") was about ~10% that of DBS at $688mil!"

MC - market cap.
A lot of people didn't know that iFast only has ~300mil shares...it just takes a bit of buying or accumulation by big whales for share price to move a few $ easily...

The news on DBS used the term "NET NEW MONEY" , while iFast used the term "Net inflow" in their report. I believe they meant the same thing, essential the net inflow into the ecosystem or platform.

the UK IGB (iFast Global Bank) is a FULL bank...