17 June 2021

(Bloomberg) — Sea Ltd. and national oil company Petroliam Nasional Bhd. are among companies planning to bid for a digital banking license in Malaysia, according to people familiar with the matter, as the country prepares to open up its financial industry.

Local conglomerates Genting Bhd. and YTL Corp., and the government of Sarawak state on Borneo island are also considering a bid, the people said, asking not to be identified because the information is private. Some of the firms such as Sea and YTL have joined forces and plan to bid as a consortium, they said. They join ride-hailing and payments firm Grab Holdings Inc., Sunway Bhd. and others who have also expressed
interest.

Malaysia’s plan to issue as many as five digital banking licenses has unleashed a flurry of activity among tech firms, banks and others seeking to gain a foothold in financial services. Final bids are due by June 30 and Malaysia’s central bank is expected to decide on the winners by the end of 2022.

Read about which other firms are bidding for the licenses Malaysia joins Hong Kong and Singapore in opening up its banking sector to non-financial players to keep up with a shift toward technology, non-cash transactions and online lending. The ongoing pandemic is also accelerating the need for digital transactions with traditional banks such as HSBC Holdings Plc planning to close some of its branches in Malaysia as part of its strategy to go digital.

Representatives at Sea, Grab and Sarawak state government declined to comment, while YTL and Genting didn’t respond to requests seeking comment. Petronas is looking to focus on digital Islamic banking with a financial institution partner, the people said. The firm’s representatives didn’t respond to multiple requests for comment.

Major firms vying for Malaysia’s digital-banking licenses

• Axiata-RHB consortium
• Petronas-led consortium
• Touch ‘n Go and partner
• Grab
• Sarawak State Government consortium
• Sea-YTL consortium
• AirAsia

“Existing fintech companies will get a significant boost in their credibility to gain trust quicker from consumers with the official identity as a bank, as well as a legal license to
perform banking activities which remains highly regulated in Malaysia,” said Chua Zhu Lian, Investment Director at Fortress
Capital Asset Management Sdn. “From a national perspective, it
will be a major milestone to transform our economy into a
digital economy.”

Singapore in December awarded four digital banking licenses to Grab, Sea, Ant Group Co. and a consortium involving China’s Greenland Financial Holding Group, paving the way for the technology giants to expand their financial services in the Southeast Asian hub.