Among the awardees of the Monetary Authority of Singapore’s (MAS) digital bank licence, Sea is the only one that has yet to launch and provide details on its offering.
When it first got the licence in December 2020, Sea chairman and group CEO Forrest Li said the bank — dubbed MariBank — seeks to address the underserved financial needs of young consumers and SMEs in Singapore.
Since then, not much information has been shared by Sea and the company has not responded to The Edge Singapore’s request for comment.
However, the MAS’s Financial Institutions Directory lists Zheng Yu Dong as MariBank’s CEO. Zheng joined Shopee Singapore in 2019 as its head of retail finance from his previous position as the CEO of Nasdaq-listed Pintec Technology’s wealth management and robo advisory subsidiary, Polaris.
Through its three platforms Shopee, Garena and SeaMoney, Sea claims to be deeply integrated into Singapore’s digital economy with young consumers and SMEs.
MariBank will draw on insights about the needs of these users from across Sea’s existing digital ecosystem. That said, Sea’s performance has not been stellar of late.
The tech conglomerate saw losses more than double in its 2QFY2022 ended June 30 compared to the same period a year earlier. The losses rose 114% from US$433 million ($608 million) to US$931 million, though revenue rose 29% to US$2.9 billion. As a result, its share price took a hit, plunging 18.5% since its 2QFY2022 results announcement and down 71.7% ytd to US$63.05.
From the breakneck expansion of the early years, Sea is now taking a breather. In recent weeks following the earnings announcement, the company has rescinded job offers and laid off staff.
On Sept 19, Bloomberg reported that Sea is preparing to fire 3% of Shopee employees in Indonesia. Similar reports have since emerged from Taiwan and Singapore.
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The top management led by Li has even committed to forgo a cash salary for now and cost-cutting measures have been implemented as Li urges his “sailors” — as he dubs his colleagues — to hunker down for a coming storm that is not going to pass by that quickly.
In his Aug 19 report, PhillipCapital analyst Jonathan Woo says the quarter’s loss was worse than expected, standing at 79% of his FY2022 forecasts.
However, he acknowledges that Sea’s payments arm SeaMoney is the fastest growing segment, leveraging on “synergies” with Shopee as it continues to tap on vastly underserved markets to grow its user base. In 2QFY2022, SeaMoney recorded revenue of US$279 million, up 214.4% y-o-y. Quarterly active users across SeaMoney products and services reached 52.7 million, up 53.3% y-o-y.
The company also said in its earnings report that close to 40% of the quarterly active buyers on Shopee in Southeast Asia have used SeaMoney products or services during the quarter.
SeaMoney has partnered with other parties to acquire licensed financial institutions and financial services technologies and providers, including commercial banks.
For instance, it acquired a controlling interest in Indonesia’s local commercial bank Bank Kesejahteraan Ekonomi in 2020, subsequently launching SeaBank in the country in the latter half of 2021. It also obtained a bank licence in the Philippines, which led to the launch of SeaBank there in March this year.
In both countries, SeaBank offers customers daily interest of up to 6% p.a. on the among of daily balance in their accounts. In Indonesia, SeaBank also offers a time deposit product which provides higher interest rates of up to 7% p.a. With a one-month maturity, customers get interest income every month. It is unclear if MariBank will offer similar products and services to SeaBank.
As of April 22, Sea has obtained licences and approvals necessary to provide electronic money services in Indonesia, Vietnam, Thailand, the Philippines, Malaysia and Singapore. The company also has the necessary requirements to provide loans in Indonesia, Thailand, the Philippines and Malaysia.
