iFAST enters deal to acquire 85 percent of UK-based BFC Bank

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IFAST Corp. has entered a deal to acquire an 85 percent stake in BFC Bank, which is fully licensed in the U.K. for around 25 million British pounds, or around S$45.9 million from BFC Group, in a move to add a digital bank to its wealth management platform, the Singapore-based fintech said in a filing to SGX Friday.

The Singapore fintech said it will also inject around 15 million pounds into the bank.

The deal will be funded with a combination of internal funds, bank borrowings and/or fund raising in the capital markets, iFAST said.

In its five-year plan, iFAST had said it believed investors from emerging markets would be looking for wealth-management platforms globally which can provide seamless access to global products and exchanges.

“Wealth management platforms with seamless links to good digital banking services that allow consumers and investors to manage payment flows seamlessly across borders while getting attractive deposit rates in various currencies, will have strong advantages,” Lim Chung Chun, chairman and CEO of iFAST, said in the statement.

“With that in mind, the group believes that one of the central components of the iFAST Ecosystem going forward will be a digital bank located in a trusted jurisdiction,” Lim said, adding a fully licensed U.K. bank would fit the requirements well, citing London’s status as a financial center.

IFAST said the deal would allow current clients across various Asian markets to access services including online account opening, multi-currency deposits, remittances and cross-border transactions, and banking as a service (BaaS).

iFAST has applied for digital bank licenses in Hong Kong and in Malaysia in mid-2021, as part of consortiums. The company was among the bidders for a Singapore digital bank license, but didn’t receive the nod.

BFS Bank posted a net loss of 1.9 million pounds, or around S$3.4 million, for the January-to-September period of 2021, based on an 85 percent stake, iFAST said, adding that requested around 12.4 percent of iFAST’s net profit.

For 2022 and 2023, iFAST said it expected start-up losses from the bank, but added it projects robust growth in its own profitability from 2021 to 2025, boosted by contributions from the Hong Kong ePension division.

Under the deal, iFAST will subscribe for 1.7 million new shares, or an 85 percent stake, of Eagles Peak Holdings Ltd. (EPHL), an entity created for the acquisition of BFC Bank, for 40 million pounds, the filing said.

Currently, EPHL’s sole shareholder is MMSS Investments, which is wholly owned by MA Holdings, which is in turn wholly owned by Mandeep Ahluwalia, the co-founder and managing partner of Syndeo Capital and Shivam Advisors, the filing said.

MMSS Investments will hold the remaining 15 percent of EPHL, which will be the holding company of BFC Bank, the filign said.

BFC Bank’s current owner, BFC Group, or Bahrain Financing Company, is licensed by the Central Bank of Bahrain and specialises in global money transfers, foreign exchange and wholesale currency services; it incorporated BFC Bank in 2003.