ANEXT Bank, a digital wholesale bank based in Singapore and a subsidiary of Ant International, experienced a near 10% increase in losses in 2023, even as revenue grew almost sevenfold, according to DealStreetAsia’s analysis of regulatory filings.
In its annual return filed with Singapore’s Accounting and Corporate Regulatory Authority (ACRA), ANEXT Bank reported a nearly sevenfold surge in net interest income to S$22.2 million (US$16.5 million) in the financial year ending 31 December 2023, from S$3.2 million in the previous year.
However, the bank’s comprehensive loss for the year widened to S$29.8 million (US$22.2 million) from S$27.2 million (US$19.7 million) in 2022, as total operating expenses ballooned by 52.5% to S$45.9 million (US$34.2 million).
The cost-to-income ratio exceeded 187%, indicating that for every dollar of income generated, over S$1.87 was spent on operational and administrative costs.
Operating and administrative expenses, which include tech service fees and legal, professional, and licensing fees, accounted for over half of the company’s total annual expenses at S$24.1 million.
Staff costs also saw a nearly 35% year-on-year increase to S$21.8 million.
Meanwhile, customer deposits soared by 370% to S$295 million (US$219.8 million) in 2023, including S$39.6 million from a related party, and loans and advances jumped to S$222.2 million (US$165.5 million), the bank’s operational expenses remained a significant concern.
Despite the losses, ANEXT Bank’s reserves with the central bank increased fourfold to S$59.2 million last year, and total assets grew to S$734.6 million.
ANEXT Bank said in a LinkedIn post,
“While growth is imperative, it’s more important to ensure the growth is sustainable.
The increase in operating and staff costs resulted from more investments made in technology, risk management and our people – a deliberate approach to drive continuous innovation, ensuring we stay agile in meeting our customers’ ever-evolving banking needs while fortifying ourselves against future uncertainties.”
As of 31 May 2024, 69% of ANEXT Bank’s customers are micro businesses, underscoring its focus on serving this segment.
In March 2023, ANEXT Bank received a S$250 million (nearly US$188 million) capital infusion from parent company Ant Group, followed by another S$200 million this year, bringing Ant Group’s total investment in the subsidiary to about US$503.8 million.
This article was updated on 24 July at 1.40 pm to include ANEXT Bank’s LinkedIn post
Featured image credit: Edited from Freepik
