KUALA LUMPUR (May 30): Axiata Group Bhd’s (KL:AXIATA) group chief executive officer and managing director Vivek Sood said Boost Bhd will launch its digital bank next Thursday (June 6).
The digital bank is a 60:40 joint venture between Boost Holdings Sdn Bhd and RHB Bank Bhd.
Axiata’s unit Axiata Digital Services Sdn Bhd (ADS) holds a 78% stake in Boost Holdings, while Great Eastern Digital Pvt Ltd owns the remaining 22% equity interest.
Upon its launch, Boost Bank will be the third digital bank in Malaysia. GXBank, backed by Singapore-headquartered Grab Holdings Inc and the Kuok group, was launched on Nov 30 last year, followed by Japanese retail giant’s Aeon Bank earlier this month.
Sood believes there is a fairly large underbanked population in Malaysia, specifically when it comes to small and medium enterprises (SMEs), and micro, small and medium enterprises (MSMEs). These two segments will be the target audience for Boost Bank.
“We have done well serving them the wallet side payments. So while the competition will be there, we think we are very well placed, because in a way, we've been doing that outside of banks. It's now going to be replicated in a bank, and hopefully with deposits, we should be able to get funding at a relatively lower cost.
“Having said that, I think it's early days for us to comment [on] whether the competition will be intense, [and] how the market is going to be shaping up, but we think there is sufficient market available for at least the three of us who want to sustain,” he told a press conference in conjunction with Wednesday’s release of Axiata's quarterly results.
According to Sood, Boost's e-wallet has more than 11 million users and over 630,000 merchant touchpoints in Malaysia.
Shares in Axiata settled three sen or 1.1% higher at RM2.77 on Thursday, bringing the group a market capitalisation of RM25.43 billion. Year-to-date, the stock has gained 16%.
On Wednesday, Axiata announced its revenue increased 13% year-on-year to RM5.66 billion in the first quarter ended March 31, 2024 (1QFY2024) from RM5 billion a year ago.
It also snapped its streak of losses and reported a net profit of RM60.03 million in 1QFY2024. But its quarterly net profit was still 19% lower compared with RM73.85 million a year ago, due to higher foreign exchange losses and finance costs.