U.S.-China financial decoupling is an odd thing. Instead of a linear progression in which Chinese firms gradually eschew going public in the US and delist from its stock exchanges, we see some Chinese companies continuing to seek exits on the Nasdaq or NYSE, while others are seeking secondary listings in Hong Kong as a hedge against forced delisting. Still others are actually being forced to delist like the telecoms giant China Mobile, which is now looking at a new listing on the Shanghai Stock Exchange.
It never felt so good to lose US$422 million. Just ask Sea Group. Southeast Asia’s most valuable listed company indeed went deeper into the red in the first quarter, but its revenue also grew 147% year-on-year to US$1.76 billion. Investors like what they see. Sea’s stock price has risen almost threefold to US$246 from roughly US$83 a year ago.
Australian regulators are stepping up the fight against financial crime after issuing a staggering US$921.59 million in fines in 2020. Disciplinary action against Westpac for serious breaches of Australia’s AML/CFT act accounted for US$920.7 million of that total.In the Asia-Pacific region, only Malaysia issued more fines than Australia in 2020, and that was because of the 1MDB scandal.
Singapore’s largest lenders have started the year off on a cracking note. First DBS reported record earnings and now OCBC has done the same. The city-state’s second largest bank posted a net profit of S$1.5 billion in the January to March period, compared to S$698 million during the same period a year earlier and well exceeding Refinitiv’s estimate of S$1.08 billion.
Taiwan’s two top e-wallets, Jkopay and Line Pay, have grown exponentially in terms of transaction volume in recent years yet have failed to turn a profit. Data compiled by Taiwan’s Chinese-language Business Next show that Jkopay lost about NT$346 million, slightly less than the NT$347 million in losses a year earlier. Line Pay likely lost NT$424 million in 2020, up nearly 70% year-on-year.
Ride-hailing giant Gojek is stepping up its super app play with new fundraising and the purchase of a stake in Indonesian conglomerate Lippo’s retail unit, MPPA. Earlier in May, Indonesian celluar operator Telkomsel, a subsidiary of state-owned communications giant PT Telkom Indonesia, said it would invest an additional US$300 million in Gojek. Shortly thereafter, a filing on the Indonesian Stock Exchange revealed that Gojek paid 144.85 billion rupiah (US$10.2 million) for a 4.76% stake in MPPA.
South Korea only has a handful of prominent fintechs, but they are still managing to give incumbents a bank a run for their money when it comes to online banking services. Chief among them is Kakao Bank, with 14.1 million users (more than ¼ of South Korea’s population) as well as K bank and Viva Republica’s Toss, which will launch a digital bank later this year. With the rising popularity of digital banking, South Korea’s traditional lenders are mulling launching neobanks of their own.
2021 is shaping up to be a pretty good year for DBS. Southeast Asia’s largest bank posted record earnings of US$1.52 billion in the January-March period, up 72% year-on-year. DBS generated record fee income in the first quarter, with especially strong growth in wealth management and transaction services, both of which hit new highs. DBS is not resting on its laurels though and plans to boost both its digital capabilities and international footprint.
Singapore and Thailand have made cross-border payments history with the linkage of their respective real-time retail payment systems, PayNow and PromptPay. The linkage is the first of its kind in not just Asia but the world and comes after several years of close collaboration between the Monetary Authority of Singapore (MAS) and Bank of Thailand (BoT).
Indian payments unicorn Razorpay has grown exponentially during the pandemic as the subcontinent accelerates its transition to online shopping and digital finance. In the six months since it hit unicorn status, Razorpay has seen its valuation treble to US$3 billion. The Bangalore-based firm will use the US$160 million it raised in its latest fundraising round – in which Sequoia Capital India and Singapore’s sovereign fund GIC Pte participated – to fund expansion in Southeast Asia and develop new product lines. With this latest round of funding, Razorpay has raised US$366.5 million.
Citibank is calling it quits in many of Asia-Pacific’s retail banking markets, including mainland China, India, Indonesia, Thailand, Vietnam, South Korea, Taiwan and Australia. Citi’s performance across these markets varies greatly, but overall, the US banking giant feels it lacks the scale to compete in them. Citi plans to focus its Asian retail banking business in the financial centers of Hong Kong and Singapore.
The arrival of digital banks in Hong Kong and Singapore has put some pressure on incumbents to up their game. At a minimum, traditional banks in Asia’s two main financial centers have slashed some unpopular fees and invested in more digital technology. Now that Malaysia has decided to introduce digital banks, its incumbent banks face some similar challenges to their counterparts in Hong Kong and Singapore.
At long last, Line Bank has arrived in Taiwan. On April 22, the Japanese messaging app’s virtual bank went live, becoming the second digital bank in Taiwan after Rakuten Bank. Line Bank had been hampered by both pandemic and regulatory related delays. It originally planned to launch in mid-2020. Of the three virtual banks approved by the Financial Supervisory Commission (FSC), Line Bank has the strongest digital services ecosystem thanks to the popularity of its messaging app, e-wallet, entertainment and social commerce with Taiwanese consumers.
Singapore is steadily carving out a niche for itself in the emerging green finance segment. Much as it has done with fintech, the Monetary Authority of Singapore (MAS) is taking steps to make the city-state a hub for this up-and-coming area of financial services. MAS reckons that Asean will need annual green investment of US$200 billion annually. Given its role as the region’s leading financial center, Singapore is a natural choice to lead green financing efforts.
In the world of fintech unicorns, a bit of exaggeration comes with the territory. After all, we are talking about companies valued in the billions or tens of billions of US dollars, despite failing to make a profit (in most cases). This is a world where what counts is not the shaky balance sheet today, but the supposed potential to revolutionize banking tomorrow. Growth is paramount – that’s how to keep the funding spigot on. But this approach to financial services comes with manifold risks. Possible compliance deficiencies at Australia’s Airwallex illustrate this point.