Latest / Investor Exchange / iFAST Corporation Q1 2025 Performance

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iFAST Corporation Q1 2025 Performance · Investor Exchange

• 0:02
  Time for another Investor Exchange podcast. Here are your hosts, Matt and Sally.
• 0:08
  You're tuning into the deep dive. We know you're swamped with information. Everyone is these days.
• 0:13
  It's hard to keep up. Exactly. And you want to be informed, you want to get it, but who has the time?
• 0:18
  So that's what we do. We take the deep dive for you, cut through the noise and
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  pull out the stuff that really matters.
• 0:24
  And today we're zooming in on iFast Corporation, specifically their latest financials. Yep.
• 0:29
  We've been looking at their first quarter 2025 results, the earnings release,
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  the presentation slides, the whole package.
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  Our mission to give you a really clear, quick understanding of where they stand financially right now.
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  What went well, what maybe didn't and what they're saying about the rest of the year. Exactly.
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  The full picture. OK, so let's jump right in. Q1 2025 versus Q1 2024.
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  What were the big headline numbers that caught your eye? Well,
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  the first thing that really stands out is the total revenue.
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  Big jump there. How big? They hit SS 106.92 million dollars.
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  That's up 24.4 percent from the same time last year. A really strong start.
• 1:09
  Wow. 24.4 percent. That's pretty substantial year on year growth.
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  It is. And it sets a positive tone right away.
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  So did that strong revenue carry through to the bottom line?
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  How did profitability look? It did. Yeah. Net profit was also up nicely.
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  31.2 percent year on year, reaching $19.04 million. OK.
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  And if you look at the profit specifically for the owners of the company.
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  It's right there to $19.04 million this quarter.
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  Compared to $14.51 million last year. So it's profitable growth.
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  Good to see. What about for the shareholders, like earnings per share?
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  That followed suit. Basic EPS climbed to $0.637, up from $0.489 in Q1-24.
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  So investors are seeing better returns per share too. And they shared the love
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  a bit more with the dividend too, didn't they? They did.
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  Bumped up the interim dividend. It's now $1.60 per share for the quarter.
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  Which was? 1.30 cents last year. So a decent little increase.
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  Maybe show some confidence for management. Okay. So higher revenue,
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  higher profit, better EPS, bigger dividend.
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  Sounds like a pretty solid quarter overall. Yeah. The headline figures definitely
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  paint a positive picture.
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  So what's behind this? What were the key things driving this strong performance?
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  Well, a really big piece of the story of this quarter is the IFAS Global Bank, IGB.
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  Ah, yes. That's been one to watch, hasn't it? They're a UK-based bank. Absolutely.
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  And it looks like it's, well, it's turned profitable.
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  Really? Profitable already? Yeah. Reported a net profit of 1 million Singapore dollars in Q1. Wow.
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  Compared to last year? Compared to a $2.28 million loss in Q1 2024.
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  So that's a swing of over $3 million.
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  Pretty significant turnaround. That is a big swing. What drove that?
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  How did they pull that off? Mostly just really strong revenue growth within the bank itself.
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  IGB's gross revenue more than doubled up 104.9% year-on-year. Doubled.
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  Okay, where did that come from? Two main things, really. A huge surge in customer deposits.
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  How huge? They grew 123.6% year-on-year, reached $1.15 billion by the end of March.
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  Okay, so people are trusting them with more money. That makes sense. Right.
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  And the other part was their EzraMit business, the remittance service. How did that do?
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  Really well. Its fee income was up nearly 74% year-on-year, record transaction
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  volumes apparently, and they're expanding in the Gulf region.
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  Interesting. So IGB moving from a drag to a contributor is a major plus.
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  A huge plus, yeah. They also launched a couple of new things for UK customers
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  like a debit card and a cash ISA, which probably helped track some deposits too.
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  Okay, so the bank's turnaround is clearly a big factor. But what about their,
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  you know, bread and butter, the core wealth management platform?
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  Was that still growing? Oh, absolutely. That continues to be the main engine.
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  The reports mention broad improvements there. And I guess with the bank now
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  profitable, the overall contribution from banking ops to total revenue is more meaningful.
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  Exactly. That mix is starting to look a bit more diversified.
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  And within wealth management itself, how did the different parts perform?
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  B2B, B2C? Pretty strong across the board, especially in Singapore.
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  Assets under administration, or AUA, hit record highs there. In all segments. Yep.
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  B2B, AUA up 16.4% year-on-year.
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  IGM, that's their global markets arm, up 19.6%. And B2C, the direct side,
• 4:24
  up 22.0%. Solid numbers. And that translated to revenue in Singapore.
• 4:29
  Yeah, net revenue for Singapore was up 11.6% year-on-year.
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  Okay. How about the other key markets, like Hong Kong?
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  Hong Kong also saw very strong AUA growth.
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  B2B up almost 25%, IGM nearly 29%, and B2C just over 20%. Really robust there. And Malaysia.
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  China. Malaysia's net revenue grew a healthy 15.8% year-on-year.
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  China was up 15.6% too, so generally positive momentum geographically.
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  Seems like the core business is firing on multiple cylinders then. It does seem that way.
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  Were there any other sort of standout positive factors boosting the numbers?
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  Well, yeah. Another thing worth noting is the big jump in interest revenue.
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  Ah, with rates being higher, maybe? Likely part of it, yeah.
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  Total interest revenue leaped 113% year-on-year to over S-15 million dollars.
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  Wow. Was that mostly the bank? A lot of it was, yes.
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  Interest revenue from banking operations surged 135%. But even non-banking interest revenue was up.
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  Okay. And drilling down even more interest they earned on their own financial
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  investments within the bank was up, get this, 343%. Whoa.
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  Okay. So their treasury folks seem to be doing a good job too. Seems like it.
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  Making those assets work harder. All right. So lots of positives.
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  The IGB turnaround is huge. The core platform is growing well everywhere.
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  Interest income is way up. But, you know, no report is perfect.
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  Were there any areas of concern or things dragging on performance?
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  There are a couple of things to keep an eye on. One is operating expenses.
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  They rose. How much? Total operating expenses were up 10.8% year on year.
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  Hitting about S44.5 million dollars. Okay, what drove that?
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  Well, commission and fee expenses were up nearly 24%, which kind of makes sense
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  if revenue's up. Right. More business, more commissions.
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  Sure, variable costs. Exactly. But interest expenses, excluding leases,
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  also jumped significantly up 115.6%. Again, potentially linked to funding growth
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  or higher deposit rates, but still a big jump.
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  We also saw increases in depreciation, both for equipment and right-of-use assets,
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  and staff costs were up almost 14%. So costs are definitely rising.
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  Something to watch for margin pressure, maybe? Definitely worth monitoring.
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  Were there any specific regions where performance wasn't quite as stellar,
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  despite the overall growth? Yeah, Hong Kong was interesting.
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  Gross revenue there was actually up a decent 12.8%. But its profit before tax
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  actually declined by 6.8% year on year. Okay.
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  Why is that? They said it was due to increased investments in their pension division.
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  They're basically staffing up and getting ready for a big onboarding push. Ah, okay.
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  So spending money now to hopefully make more later on that big Hong Kong pension
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  project. That seems to be the rationale.
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  Short-term pain for potential long-term gain.
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  Got it. What about China? Still loss-making? Still loss-making, yes.
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  But the loss narrowed quite a bit. Down 42% year-on-year to just under S1 million
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  dollars. So moving in the right direction, but not profitable yet.
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  Any other sort of specific line items that look negative?
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  Yeah, a couple of things under other income. Government grants were down significantly, about 74%.
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  And dividend income from some other investments was down 25%.
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  Smaller items, but they contributed less.
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  And one of their balance sheet item, their cash plus liquid assets,
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  net of borrowings, actually decreased quite a bit from the end of last year.
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  Dropped from $112 million to $79 million.
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  Okay, so using up some cash, maybe for those investments or working capital,
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  something to note. Exactly.
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  Not necessarily bad, but worth being aware of. Okay, so we have this picture.
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  Strong overall results driven by the bank and core growth, but with rising costs
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  and some strategic spending impacting Hong Kong profit short-term.
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  What's the outlook? What are they telling us about the rest of 2025?
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  They sound pretty optimistic, actually. The official statement says they expect
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  healthy progress across the business segments and robust growth in revenues
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  and profitability for the full year compared to 2024.
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  Robust growth. That sounds confident. It does. Barring unforeseen circumstances,
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  of course, as they always say. Yeah.
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  But yeah, the tone is positive. And what do they see as the main drivers for the rest of the year?
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  Well, continued AUA growth in the core wealth platform, obviously.
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  They see that driving more revenue and profit. And crucially,
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  they expect IFAST Global Bank to achieve full-year profitability in 2025.
• 8:51
  Ah, so locking in that turnaround for the whole year, that would be a big milestone. Absolutely.
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  And for Hong Kong, despite that Q1 dip in profit, they expect the pension division
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  to really start contributing more as the onboarding happens.
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  They're specifically calling out higher revenues and profitability from Hong
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  Kong a pension in the second half of 2025. So they expect those investments
• 9:12
  to start paying off relatively soon. That's the plan.
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  They did revise their full-year profit target for Hong Kong, though. Downward.
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  Yeah, slightly. The target for profit before tax in HK for 2025 is now over HK $380 million.
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  It was HK $500 million before. Okay, so acknowledging the cost of those e-pension investments.
• 9:33
  Right, but they're sticking to a target of double-digit growth in revenue and
• 9:36
  profit for Hong Kong overall in 2026. So they see this year's adjustment as temporary.
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  And what about longer term? Any sense of the bigger picture vision?
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  Yeah, they talked about their three-year plan, 2025 to 2027.
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  It focuses on scaling the wealth platform, making IGB sustainably profitable.
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  Delivering on the pension project, and developing new fintech services.
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  Standard growth pillars, sounds like. Pretty much.
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  And they reiterated that really ambitious long-term target, AUA,
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  of some hundred billion dollars by somewhere between 2028 and 2030. Wow. So $100 billion.
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  That's a huge leap from where they are now, around $25 billion.
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  It is. Very ambitious. OK, so let's try and wrap this up.
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  Our deep dive into IFAS Q1 shows, well, a pretty strong quarter overall,
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  wouldn't you say? Yeah, I think so.
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  The big story is definitely the IGB turnaround moving into the black.
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  That's massive for them. Right.
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  And the core wealth business is still chugging along nicely,
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  growing AUA in key markets.
• 10:33
  Exactly. But we also saw those rising costs and the strategic spending in Hong
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  Kong hitting profit there for now. True.
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  But the outlook seems positive, with expectations for full-year profit from
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  the bank and the Appension Project hopefully starting to deliver later this
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  year. That's the gist of it.
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  It feels like their diversification into banking is starting to show tangible
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  results while the core remains solid.
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  So for you listening, if you're trying to get a quick, solid understanding of
• 10:59
  IFAST, this quarter shows a company making progress, especially with the bank
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  finally contributing positively. Yeah, the strategy seems to be clicking in
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  that respect. Core business looks healthy.
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  Investments are being made for future growth, particularly in Hong Kong pensions.
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  Which leaves us with a final thought, maybe something for you to chew on. Go for it.
• 11:18
  With IFAST pushing hard on both wealth management and this increasingly integrated
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  global banking piece, especially across Asia Pacific.
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  How might their journey, whether it's smooth sailing or hit some bumps,
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  actually reshape the whole landscape for digital finance?
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  And how people manage their money in this region and maybe even beyond?
• 11:39
  Hmm, that's a good question. Their ambition is certainly there.
• 11:42
  It'll be fascinating to watch how it plays out and who else responds.