After Mynt IPO, GCash eyes digital banking

MANILA, Philippines — Listed e-wallet GCash is seeking to break another barrier as it works to bring more Filipinos into financial services, with plans to explore becoming a digital bank.

GCash head of capital markets and investor relations Joseph Samuel Tang said yesterday the e-wallet’s next step is to assess opportunities in the digital banking space.

Tang said GCash is ripe for a digital banking license because it has a strong payment platform and an emerging loan portfolio for small borrowers.

GCash processed P9.8 trillion in transactions from January to June, up by 23 percent from a year ago. Likewise, the e-wallet’s credit portfolio stands at P70.5 billion to date, and it manages a non-performing loan ratio of just 4.9 percent.

“Definitely, our opportunities are always considered together with the digital banking license. It is something that we constantly evaluate even up to today,” Tang said.

A digital banking license will mandate GCash’s parent Mynt Inc. to go up the same standards as traditional banks, from capital requirements to risk management.

GCash could benefit from becoming a digital bank, as it would attract a new consumer market that is capable of placing more amounts into deposit accounts in exchange for higher yields.

GCash is looking for fresh opportunities now that it is a publicly listed entity. Expanding into the credit, savings and wealth businesses as a digital bank may support its growth.

Mynt booked the country’s largest IPO in history yesterday, generating P60.9 billion and achieving a market capitalization of P442 billion. Net proceeds from the offer will go largely to building up its loan business and payment products.

Based on its final prospectus, Mynt will spend P5.65 billion, or 60 percent of the net proceeds, to fund its lending expansion over the next three years. Mynt is also placing P1.88 billion to bolster product development, as GCash aims for cross-border capability.

Still, Tang said GCash’s growth momentum can be sustained even without a digital banking license, as the e-wallet caters to around 41.5 million users monthly.

GCash is the country’s biggest e-wallet, handling more than 63.6 million transactions daily, with a suite of financial services ranging from cash remittances to quick loans.