KUALA LUMPUR (May 5): Shares in digital bank licence winners such as AEON Credit Service (M) Bhd, RHB Bank Bhd, YTL Corp Bhd and Axiata Group Bhd had pared some of their gains at midday break on Thursday (May 5) amid profit-taking following a long weekend due to Labour Day and Hari Raya holidays.

Last Friday (April 29), Bank Negara Malaysia (BNM) announced the five successful applicants for the digital bank licences which included the consortiums of Boost Holdings Sdn Bhd, an Axiata subsidiary and RHB Bank; GXS Bank Pte Ltd and Kuok Brothers Sdn Bhd; Sea Ltd and YTL Digital Capital Sdn Bhd; AEON Financial Service Co Ltd, AEON Credit and MoneyLion Inc; and one led by KAF Investment Bank Sdn Bhd.

The counters of AEON Credit, RHB Bank, YTL Corp and Axiata climbed following the announcement, with AEON Credit gaining 30 sen to close at RM15.90 last Friday. RHB Bank was up six sen to close at RM6.25 and YTL Corp added four sen to close at 63.5 sen, while Axiata pared gains to closed unchanged at RM3.51.

However, at noon break on Thursday (May 5), AEON Credit was second among the top 10 losers, with its share price falling 40 sen or 2.52% to RM15.50. RHB Bank also slipped 10 sen or 1.6% to RM6.15, YTL Corp was down three sen or 4.72% to 60.5 sen and Axiata lost nine sen or 2.56% to RM3.42.  

In a note today, UOB Kay Hian Research said there could be a short-term uptrend for the digital bank licence awardees, but noted that any near-term spike in share prices could be short-lived.

“Given the marginal near- to medium-term value accretion, coupled with an expected two- to three-year gestation period (the average period for digital banks in South Korea and China to be profitable was two to three years), we think that any near-term spike in share prices could be short-lived,” it said.

Last week, BNM said the successful applicants will undergo a period of operational readiness that will be validated by the central bank through an audit before they can commence operations. This process may take between 12 months and 24 months.

Read also:
Digital banks not a major threat to conventional counterparts, say analysts
High turnover among banking stocks despite minimal changes in share prices
BNM awards digital banking licences to Boost-RHB, GXS Bank-Kuok Brothers, YTL-SEA, AEON-MoneyLion, KAF Consortium