SHAREHOLDERS of wealth-management platform iFast Corporation : AIY 0% can look forward to more generous dividend payouts next year, in tandem with the group’s expectations of “robust growth” in revenue and profitability.

“Going into next year, as we expect profits to substantially increase, there is certainly room for an increase in dividends,” said iFast’s chief executive Lim Chung Chun at a briefing with reporters and analysts on Thursday (Oct 26) to discuss the company’s latest financial results.

While he did not give a specific percentage of profits that the group will pay out as dividends to shareholders for the next year or two, he said that the group is looking at distributing one-third to half its net profits in 2024 as dividends. 

The key reason for this is that iFast now owns a bank, he noted. To recap, the group acquired an 85 per cent stake in UK-based BFC Bank – now known as iFast Global Bank – early last year. The group will now focus on strengthening the balance sheet of the bank, which requires more capital allocations, he said.

But a bulk of iFast’s revenue and profitability still comes from fee income, which will enable the company to generate a “very high return on equity” in the near term. For the nine-month period this year, the company’s return on equity stood at 8.8 per cent. 

On Wednesday, iFast announced that its earnings for the third quarter had risen to S$8.5 million, up from S$2.1 million in the corresponding year-ago period. Revenue for the quarter was up 19.2 per cent to S$62.2 million from S$52.2 million, thanks to the diversified suite of offerings. The company’s board had declared an interim dividend of S$0.013 per share for the quarter under review, unchanged from the year before. 

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

Amid the current high interest-rate environment, Lim said that the group’s equities segment has stumbled. “The general perception of equity has taken a hit, because investors have become more cautious.” 

Investor interest in bonds, however, has soared. “Investors now realise you can get much better returns from various bonds,” he said. Bonds that have piqued investor interest include government bonds, investment-grade bonds, and Singapore and US treasuries. 

He warned that the outlook for China equities remains uncertain, in the light of near-term challenges in the Chinese economy. 

In response to a question on whether iFast would consider also listing in a market like Hong Kong – given the group’s rising focus on the country’s e-pension segment – Lim noted that the company is “not in a hurry” at the moment, although the issue of listing in another market has surfaced among its management.  

Although listing in a bigger market can be a positive for a stock due to a larger pool of liquidity, the situation can flip quickly. For now, he said the company will focus on improving its overall profitability. 

Shares of iFast closed on Thursday at S$6.13 on a cum-dividend basis, up 11.1 per cent or S$0.61.