Singtel Dashes Ahead of Grab In Survey On Deposits

A greater percentage of respondents expressed willingness to park money with Singtel compared to Grab, a survey conducted by CGS-CIMB finds. In a recent survey conducted by local brokerage CGS-CIMB, participants were given a scenario whereby they were offered a slight premium (another 30 basis points) to market rates at new digital banks. In this case, 45 percent of the respondents were willing to place fixed deposits with Singtel compared to just 33 percent for Grab. Only two choices were provided to survey respondents.

We noted a clear difference in the trust levels accorded to Singtel and Grab, based on their willingness to use these entities as a depository institution given an identical set of circumstances, said CGS-CIMB analyst Andrea Choong in the report.

Singtel and Grab, which operate digital wallets Singtel Dash and Grab Pay respectively, have expressed interests in applying for Singapore’s digital banking licenses. This prompted the local broker to do a survey of preferences.  The brokerage surveyed 139 respondents from various industries, with a larger proportion of them from the finance industry. Those aged between 30 and 50 years made up three-quarters of the sample pool.

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Testing for depositors’ sensitivities to interest rates with an additional 50 basis premium over the rates offered by the digital banks above, 55 percent of those who were previously unwilling to place fixed deposits with Singtel would now in this case, compared to just 40 percent for Grab, the brokerage said.

CGS-CIMB estimates that 4 to 11 percent of deposits from the domestic banking unit is at risk of being taken by the upcoming new digital banks in Singapore. However, the brokerage acknowledged that this simulation does not take into account «retaliatory measures» by incumbent banks and the effects of further Fed rate cuts.

The brokerage surveyed 139 respondents from various industries, with a larger proportion of them from the finance industry. Those aged between 30 and 50 years made up 75 percent of the sample pool.

The fight for deposits is essential for digital banks, as they need cheap retail deposits to move towards profitability. The Monetary Authority of Singapore, in setting out the guidelines for digital banks here, had made it clear that digital bank applicants cannot engage in predatory pricing behavior, and must show a path towards profitability in their five-year financial projections.

Currently, DBS, OCBC and UOB’s Singdollar deposits account for 24 percent, 17 percent and 20 percent of total deposits in the domestic banking unit – the unit that mainly accounts for Singdollar deposits.

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