iFAST Corporation AIY -0.13% has announced the launch of iFAST Global Hub.ai in Malaysia on Nov 21, an initiative part of the group' s three-year growth plan to become a prominent global player in digital banking, wealth management and pension administration solutions.

 

As part of its strategic expansion, iFAST Global Hub.ai is set to invest over RM150 million ($43.2 million) and will occupy more than 63,000 sqft of office space over the next five years. 

 

iFAST Global Hub.ai, formerly known as iFAST Service Centre, initially served as a regional service centre in Malaysia, offering call services, IT application development and operational support to the group. 

 

Following its transformation into a global digital hub for the entire iFAST Group, iFAST Global Hub.ai now plays a central role in most of the group&rsquo s business functions. It is set to significantly enhance operational efficiency and scalability and play a pivotal role in supporting the group&rsquo s improved effectiveness to deliver financial services to clients worldwide, says iFAST.

 

The new digital hub will focus on utilising advanced technology, particularly artificial intelligence (AI), to enhance the group&rsquo s fintech capabilities, bolster its operational efficiency, optimise workflows and promote scalability.

 

The establishment of iFAST Global Hub.ai will enable the group to effectively navigate an evolving business landscape, ensuring sustained growth and value creation for its stakeholders, says Lim Chung Chun, chairman and CEO of iFAST Corp. &ldquo With the integration of cutting-edge technologies, including AI, iFAST Global Hub.ai is set to revolutionise the way iFAST operate and serve our clients.&rdquo

 

iFAST Corp also announced its AI initiatives at its Nov 21 launch event in Malaysia, including plans to automate customer service with in-house AI solutions by end-2025, enabling the company to provide customer service support in over 50 languages, catering to clients worldwide around the clock.

 

&ldquo We recognise the potential of generative AI as we strive towards its integration into our products, and services, as well as our core operations. We believe this will not only elevate our service standards but also strengthen our position as a global fintech leader,&rdquo says Ma Qian Cheng, managing director of iFAST Global Hub.ai.

 

&ldquo Such initiatives are testaments to our commitment in delivering innovative, efficient, and globally accessible customer service solutions. Alongside automated customer service, the Group will also deploy AI in other key areas, including fraud detection, verification of identity documents, and search engine capabilities optimisation,&rdquo Ma adds.

 

FAST Global Hub.ai will also serve the key role of supporting the group' s ePension businesses, which offers a comprehensive range of pension administration services and digital solutions to its business partners.

 

iFAST Service Centre was recently awarded the Malaysia Digital (MD) status for its Digital Pension Solutions Services by the Malaysian Digital Economy Corporation (MDEC), the government agency leading the digital transformation of the Malaysian economy. 

 

MDEC CEO Mahadhir Aziz says: &ldquo We welcome iFAST&rsquo s expansion in Malaysia for its digital pension businesses. As a company that holds MD status, we believe iFAST will make an exceptional contribution and impact to Malaysia' s digital future.&rdquo

 

iFAST Global Hub.ai has also recognised the importance of synergy between academia and industry, forging strategic partnerships with several universities, including Multimedia University (MMU) in Selangor.

 

&ldquo Our active involvement in initiatives such as the iCadet Programme underscores our shared objective of nurturing graduates who benefit from early exposure to industry culture and environments, equipping them with the skills and insights needed to thrive in the workforce,&rdquo says Ma.

 

In line with the group' s growth plan, iFAST Global Hub.ai intends to recruit at least 400 digital talents to join the team over the next five years. &ldquo This strategic investment in human capital will further enhance the Group' s fintech ecosystem, bringing valuable expertise and opportunities to IT talents across the region,&rdquo says the group.

 

 

 

 

 

 

 

 

 

ANALYSTS have raised their targets on iFast Corporation, with DBS Group Research upgrading the fintech platform to &ldquo hold&rdquo from &ldquo fully valued&rdquo .

 

DBS raised its target price by 77.3 per cent to S$6.95 from S$3.92, while UOB Kay Hian (UOBKH) increased its target by 36.4 per cent to S$6.56 from S$4.81.

 

Their moves came after iFast posted an improvement in its operating metrics. Its third-quarter results released on Wednesday (Oct 25) also beat DBS&rsquo s expectations, although it missed UOBKH&rsquo s.

 

iFast posted a Q3 net profit of S$8.5 million, up from S$2.1 million in the corresponding year-ago period. Revenue rose 19.2 per cent to S$62.2 million from S$52.2 million, thanks to the diversified suite of offerings.

 

iFast is the prime subcontractor for PCCW Solutions, which won the tender for Hong Kong&rsquo s electronic Mandatory Provident Fund (eMPF) platform in 2021.

 

&ldquo With the eMPF project starting to contribute revenue alongside the improving margin trend, we believe that iFast is on track to achieve operating leverage, given its scalable business model,&rdquo said DBS analyst Ling Lee Keng.

 

However, the group could still see higher costs ahead as the initiative is still in its infancy.

 

The same can be said for iFast&rsquo s Occupational Retirement Schemes Ordinance (Orso) project &ndash an e-pension service &ndash launched in June this year. However, costs are not expected to be as high as it is able to leverage existing platforms with some customisations.

 

DBS raised its earnings estimates for FY2023 by 44 per cent and 4 per cent for FY2024 on higher margin assumptions. It also estimated a higher terminal growth rate of 5 per cent from 3 per cent previously.

 

In contrast, UOBKH trimmed its FY2023 earnings forecasts by 13.8 per cent after accounting for lower-than-expected contributions from the eMPF project and Orso ePension services.

 

Its FY2024 and FY2025 estimates remain unchanged. UOBKH believes iFast&rsquo s revenue and profit will &ldquo grow more substantially&rdquo during these financial years on contributions from the eMPF project. It also expects the Orso project to contribute to the group&rsquo s assets under administration from Q1 2025.

 

 

SHAREHOLDERS of wealth-management platform iFast Corporation : AIY +11.05% can look forward to more generous dividend payouts next year, in tandem with the group&rsquo s expectations of &ldquo robust growth&rdquo in revenue and profitability.

 

&ldquo Going into next year, as we expect profits to substantially increase, there is certainly room for an increase in dividends,&rdquo said iFast&rsquo s chief executive Lim Chung Chun at a briefing with reporters and analysts on Thursday (Oct 26) to discuss the company&rsquo s latest financial results.

 

While he did not give a specific percentage of profits that the group will pay out as dividends to shareholders for the next year or two, he said that the group is looking at distributing one-third to half its net profits in 2024 as dividends. 

 

The key reason for this is that iFast now owns a bank, he noted. To recap, the group acquired an 85 per cent stake in UK-based BFC Bank &ndash now known as iFast Global Bank &ndash early last year. The group will now focus on strengthening the balance sheet of the bank, which requires more capital allocations, he said.

 

But a bulk of iFast&rsquo s revenue and profitability still comes from fee income, which will enable the company to generate a &ldquo very high return on equity&rdquo in the near term. For the nine-month period this year, the company&rsquo s return on equity stood at 8.8 per cent. 

 

On Wednesday, iFast announced that its earnings for the third quarter had risen to S$8.5 million, up from S$2.1 million in the corresponding year-ago period. Revenue for the quarter was up 19.2 per cent to S$62.2 million from S$52.2 million, thanks to the diversified suite of offerings. The company&rsquo s board had declared an interim dividend of S$0.013 per share for the quarter under review, unchanged from the year before. 

 

Amid the current high interest-rate environment, Lim said that the group&rsquo s equities segment has stumbled. &ldquo The general perception of equity has taken a hit, because investors have become more cautious.&rdquo  

 

Investor interest in bonds, however, has soared. &ldquo Investors now realise you can get much better returns from various bonds,&rdquo he said. Bonds that have piqued investor interest include government bonds, investment-grade bonds, and Singapore and US treasuries. 

 

He warned that the outlook for China equities remains uncertain, in the light of near-term challenges in the Chinese economy. 

 

In response to a question on whether iFast would consider also listing in a market like Hong Kong &ndash given the group&rsquo s rising focus on the country&rsquo s e-pension segment &ndash Lim noted that the company is &ldquo not in a hurry&rdquo at the moment, although the issue of listing in another market has surfaced among its management.  

 

Although listing in a bigger market can be a positive for a stock due to a larger pool of liquidity, the situation can flip quickly. For now, he said the company will focus on improving its overall profitability. 

 

FINTECH platform iFast Corporation : AIY +0.55% reported a 308.4 per cent rise in net profit to S$8.5 million for the three months ended Sep 30, 2023, from S$2.1 million a year ago.

 

The increase in profitability was driven by contributions from the group&rsquo s non-banking operations, which comprise iFast&rsquo s core wealth management platform business and its ePension division.

 

Earnings per share for the third quarter stood at 2.88 Singapore cents, compared with 0.71 Singapore cent in the year-ago period, the company said on Wednesday (Oct 25).

 

Revenue from non-banking operations grew 22.3 per cent to S$60.4 million, from S$49.4 million.

 

&ldquo The Hong Kong ePension division made an initial one-month contribution during the quarter, and helped to drive the contributions from our overall Hong Kong business,&rdquo iFast said.

 

Net revenue &ndash which excludes commission and fee expenses &ndash from its non-banking operations in Hong Kong increased 113.2 per cent to S$12.7 million in Q3. Including revenue from banking operations, which grew 42.1 per cent to S$5.8 million, total revenue stood at S$66.2 million, up 23.8 per cent from the previous year.

 

Its banking operations in the United Kingdom posted a net loss of S$2.1 million, slightly better than a net loss of S$2.2 million a year ago.

 

Looking ahead, iFast expects profit contributions from its banking operations, which are still in the &ldquo initial build-up stage&rdquo , to &ldquo still be negative in the next three quarters&rdquo .

 

&ldquo However, the group expects iFast Global Bank to play a major role in the growth of the group in the medium to long term, particularly beyond 2025,&rdquo it said.

 

As at end-September, iFast&rsquo s assets under administration grew 1.7 per cent quarter on quarter and 12.6 per cent year on year to S$19.1 billion. The board has declared an interim dividend of 1.30 Singapore cents per share, unchanged from the year before. The dividend will be paid on Nov 17.