iFAST reports 2Q19 net profit fell 17 percent on costs for adding services

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Wealth-management platform iFAST Corp. reported Saturday its second quarter net profit dropped 16.5 percent on-year to S$2.45 million amid continued investments in developing the platform’s services.

“At this stage of the overall development of the fintech industry, continuing enhancements of its overall capabilities will position the group for any new and emerging opportunities,” iFAST said a filing to SGX. “Overall, the group believes that growth opportunities in Asia’s wealth management still remain very substantial, and it is well-positioned to benefit from these opportunities in the medium to long term.”

Net profit was up 52.9 percent on a quarter-on-quarter basis after a weak first quarter, iFAST said.

Revenue for the quarter ended 30 June slipped 0.9 percent on-year to S$30.64 million amid volatile market conditions and “generally jittery investor sentiment,” iFAST said, adding that caused lower front-end commission income as customers’ investment subscriptions in unit trusts declined.

Total operating expenses rose 15.6 percent on-year in the quarter to S$13.89 million on increased investments in its platform services, including improving the range of products offered to customers, iFAST said.

Assets under administration (AUA) were at a record S$9.04 billion as of 30 June, up 12.2 percent from S$8.05 billion at the start of the year, the filing said. The Singapore, Hong Kong and Malaysia businesses saw record AUAs, benefiting from efforts to improve the depth and range of products and services.

But iFAST added the China business faced a slow first half amid tough financial market conditions and a changing regulatory environment, which slowed the pace of service introduction. The China operation reported a first half loss of S$2.36 million.

For the first half, iFAST reported net profit fell 28.7 percent on-year to S$4.05 million on revenue of S$57.83 million, down 6.5 percent on-year.

In its outlook, iFAST pointed to the Monetary Authority of Singapore’s announcement it planned to issue digital bank licenses as an “exciting development,” and added that it planned to pursue a license.

“iFAST Corp. is in talks with potential partners for the upcoming application,” the filing said.

“iFAST Corp. believes that it has some natural strengths to perform digital banking as it is one of the few fintech firms in Singapore with the track record of running a profitable regulated business handling large amounts of retail monies and assets,” the company said, but added there was no guarantee it would obtain a license.

The company declared a dividend of 0.75 Singapore cents for the quarter, unchanged from the year-ago period.

In a separate filing to SGX, iFAST said it increased its stake in its associated company, iFAST India Holdings, to 38.56 percent from 34.31 percent for S$916,557, via participation in a rights issue.

iFAST India Holdings will use the proceeds of the rights issue for working capital and the growth of the business, the filing said.

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