Wealth management fintech iFAST posts weak 1Q22 on market turmoil

A market-trading screen with charts. Photo by Wance Paleri on UnsplashA market-trading screen with charts. Photo by Wance Paleri on Unsplash

Wealth-management fintech iFAST Corp. posted a weak first quarter, swinging from a “very positive” first quarter of 2021 as global market conditions turned dreary.

IFAST reported both net profit and net revenue declined in the first quarter from the year-earlier period.

“While it is clear that the wealth management platform business that the group is building has very strong long-term growth drivers, in the short term, financial market conditions can cause interruptions in its growth path, and 2022 looks likely to be one of those years,” iFAST said in a statement filed to SGX Saturday.

The company cited the sharp drop in Asia ex-Japan equities due to Russia’s invasion of Ukraine and rising inflationary pressures. In addition, Hong Kong’s spike in Covid-19 cases hurt market sentiment there, iFAST said.

“Overall, the group expects to see a moderate growth in net revenue in 2022 as a whole, but also expects to see some declines in profitability,” the company said.

The fintech posted first quarter net profit of S$5.74 million (US$4.19 million), falling 34.9 percent from the year-earlier quarter. Revenue for the first quarter declined 5.1 percent from the year-earlier period to S$52.53 million, iFAST said.

Operating expenses rose 10.4 percent from the year-earlier quarter to S$21.12 million, on investments in the group’s four-year expansion plan, iFAST said.

Assets under administration (AUA) were S$18.63 billion as of 31 March, down 2.0 percent from the fourth quarter of 2021, but up 15.6 percent from the year-earlier quarter, iFAST said. Despite declines in stock and bond prices globally, the fintech saw net inflows of S$699 million during the quarter, iFAST said.

The fintech declared a dividend of 1 Singapore cent for the quarter, unchanged from the year-earlier quarter.

Outlook

In its outlook, iFAST noted it has completed its acquisition of U.K.-based BFC Bank, now renamed iFAST Global Bank, and it is expected to contributed S$4 million in losses this year. The bank is expected to reach profitability in 2024, iFAST said.

While expecting a decline in profitability this year, iFAST projected a “robust ramp up” from 2023 to 2025, with the new ePension division in Hong Kong expected to be a strong contributor. IFAST said the Hong Kong ePension business’ targeted gross revenue for 2023 is greater than HK$400 million (US$50.98 million), rising to more than HK$1.1 billion in 2024 and more than HK$1.6 billion in 2025. And for profit before tax, iFAST said the ePension business’ target was greater than HK$100 million for 2023, more than HK$250 million for 2024 and above HK$500 million in 2025.

SGX-listed wealth-management fintech iFAST has a presence in Singapore, Hong Kong, Malaysia, China, India and the U.K. The group said it offers access to more than 15,000 investment products — including funds, bonds, stocks and ETFs — and services including discretionary portfolio management services, research and administration and transaction services. Its services are both business-to-consumer (B2C) and business-to-business (B2B).

Read more details of iFAST’s results.