KUALA LUMPUR (March 21): GX Bank Bhd, Malaysia’s first digital bank, commands the largest share of customer deposits among operational digital banks with RM2.16 billion deposits as of September 2024, according to RAM Ratings.

One of three operational digital banks, GXBank has the largest asset size at RM2.4 billion as at September 2024. AEON Bank’s total assets stood at RM711 million as at November 2024. While Boost Bank's was at RM399 million by end of September 2024, its first three months of operations.  

The combined assets of all three digital banks are well below 1% of total banking sector’s assets.

AEON Bank trails behind in terms of customer deposits at RM339 million as at November 2024, while Boost posted RM204 million in deposits as at September 2024, according to the ratings agency’s banking insights report.

All three banks, however, are yet to break even, as expected, largely due to high setup costs and income that is primarily derived from low-risk asset investments, RAM Ratings said.

GXBank reported RM189 million loss before tax for the nine-month period of financial year end December 2024, AEON Bank recorded RM91 million in losses for the nine-month period for its financial year end February 2025, while Boost Bank posted RM43 million losses for the nine-month period of its financial year end December 2024, according to data compiled by the ratings agency.

For comparison, digital banks in neighbouring Singapore have yet to turn in a profit two years in.

Since its launch in December 2023, GXBank has gained strong traction, driven by its aggressive promotional campaigns; these have been scaled back though as the bank enters its second year.

AEON Bank and Boost Bank, which launched in mid-2024, have also introduced high-interest savings accounts. However, Boost Bank has taken a more selective approach, RAM Ratings said, with a notably lower cost of funds of 1.7% compared to the 3% reported by its competitors.

Their biggest challenge remains retaining tech-savvy, price-sensitive customers while managing acquisition costs and scaling up operations without taking on excessive risks, according to RAM Ratings.

To support their growth, shareholders have injected capital into the banks in 2024.

All three banks have started lending services.

Boost Bank is focused on small and medium enterprise (SME) financing, leveraging RM120 million loans transferred from its Boost Credit platform.

GXBank offers quick approval loans to both retail and business clients, although business loans are currently limited to Grab merchants.

Meanwhile, AEON Bank is focusing on personal financing, which was launched this month.

As of February 2025, three out of five licensed digital banks in Malaysia are operational. KAF Digital Bank and RYT Bank are yet to launch, although RYT Bank has started marketing promotions.

Given the RM3 billion asset size cap for each digital bank in their first three to five years of operation, digital banks are not expected to pose a near-term threat to traditional banks, which continue to invest heavily in digitalisation and enhancing user experiences, RAM Ratings said.