GXS Bank, a digital bank backed by Grab Holdings and Singtel, aims to achieve profitability by March 2027, according to Muthukrishnan Ramaswami, GXS’ Group CEO.
Grab holds a 60% stake in GXS, while Singtel owns the remaining 40%.
The partners have committed US$1.5 billion in capital until March 2027, with no current plans for an initial public offering, according to Muthukrishnan.
According to Bloomberg, the bank’s losses expanded to US$152.1 million in 2023, up from US$113.7 million the previous year, as it accelerated its operations.
Launched two years ago, GXS focuses on serving financially underserved groups, including gig economy workers and small businesses, primarily through the Grab app.
This approach leverages data to assess creditworthiness, differentiating it from traditional banks.
Previously led by Charles Wong, who recently transitioned to an advisory role, GXS developed key products like the GXS Savings Account and GXS FlexiLoan.
Muthukrishnan emphasized that GXS Bank is not targeting the same customer base as major traditional banks, instead seeing potential in underserved population segments.
GXS and other digital banks in Singapore face stiff competition from established players like DBS Group Holdings, OCBC Bank, and United Overseas Bank, which dominate the local market with a combined 65% share of deposits and 84% of lending, according to Bloomberg Intelligence.
To navigate these challenges, GXS has set ambitious targets, including US$3 billion in deposits and a US$2 billion loan book within the next three years.
The bank’s average loan size in Singapore is approximately US$6,000, and it plans to grow profits through higher volumes and cost-efficient digital operations.
Sarah Jane Mahmud, a Senior Analyst at Bloomberg Intelligence, pointed out the limited earning potential for digital banks in Singapore, suggesting that regional expansion might be necessary.
While Singapore is expected to be a revenue driver for the next few years, Ramaswami highlighted Indonesia’s larger population as a potential growth market for the longer term.
