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Standard Chartered (SCBFF) to Launch Digital-Only Bank in Singapore
Standard Chartered PLC (SCBFF - Free Report) through its wholly owned subsidiary – Standard Chartered Bank (Singapore) Limited (“SCBSL”) – has agreed to form a joint venture (JV) to launch a digital-only bank in Singapore with BetaPlus Pte. Ltd. This move will further expand its digital banking facilities.
As part of the deal, SCBSL will own 60% interest in the JV – SC Bank Solutions (Singapore) Limited – contributing S$144 million ($107.3 million). The remaining 40% stake (worth S$96 million) will be held by BetaPlus, a holding company controlled by National Trades Union Congress (NTUC) Enterprise. The brand name for the JV is yet to be decided.
The completion of the JV will occur on the fifth business day following the fulfillment of all the conditions. While Standard Chartered doesn’t expect the JV to materially contribute to the earnings in the near term, it has the potential to lead to value creation over the medium term.
It must be noted that SC Bank Solutions was granted full banking license by the Monetary Authority of Singapore last December. Also, it will be Standard Chartered’s second “separately licensed digital bank in Asia.”
Earlier, in March 2020, Standard Chartered had unveiled Mox, its Hong Kong virtual bank. It is a JV with the wholly owned subsidiaries of PCCW Limited, HKT Limited and Ctrip.com International, Ltd.
Banks across the globe have been fortifying their digital capabilities as demand for the same has been shooting up amid the pandemic. Several global banks including JPMorgan (JPM - Free Report) , Citigroup (C - Free Report) and Bank of America (BAC - Free Report) are investing heavily in technological upgrades to enhance the digital experience of their customers. Thus, Standard Chartered’s plan to boost digital banking services is a step in the right direction.
Shares of Standard Chartered have rallied 26.1% in the past year, underperforming the industry’s rise of 45.6%.
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Currently, Standard Chartered carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.