ANEXT Bank, a Singapore-based digital wholesale bank and subsidiary of Ant International, reported that its losses increased by nearly 10% in 2023 despite a nearly sevenfold increase in revenue. DealStreetAsia Analysis Regulatory filings.
In its annual report submitted to the Accounting and Corporate Regulatory Authority of Singapore (ACRA), ANEXT Bank The company reported that its net interest income for the financial year ending Dec 31, 2023, jumped nearly seven-fold to S$22.2 million (US$16.5 million) from S$3.2 million a year earlier.
However, the bank’s overall loss for this 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 rose 52.5% to S$45.9 million (US$34.2 million).
The cost-to-income ratio was over 187%, which indicates that for every dollar of revenue generated, over S$1.87 was spent on operational and administrative costs.
Operational and administrative expenses, including technical service fees, legal, professional and licensing fees, accounted for S$24.1 million, more than half of the company’s total expenses for the year.
Labour costs also increased by nearly 35% year-on-year to S$21.8 million.
Meanwhile, customer deposits grew 370% to S$295 million (US$219.8 million) in 2023, and loans and advances jumped to S$222.2 million (US$165.5 million), including S$39.6 million from associated companies, but the bank’s operating costs remain a major concern.
Despite the losses, Anext Bank’s reserves with the central bank rose four-fold last year to S$59.2 million, while its total assets grew to S$734.6 million.
As of May 31, 2024, 69% of ANEXT Bank’s clients are small and medium-sized enterprises, highlighting its focus on serving this sector.
ANEXT Bank received a capital injection of S$250 million (about US$188 million) from parent Ant Group in March 2023 and is set to receive a further S$200 million this year, bringing Ant Group’s total investment in the subsidiary to about US$503.8 million.
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