Welcome to this week’s edition of top stock market highlights.
Trust Bank, a digital bank collaboration between NTUC and Standard Chartered Bank (LON: STAN), has lofty ambitions.
According to its CEO Dwaipayan Sadhu, the bank has set its sights on becoming the fourth-largest retail bank in Singapore in terms of customer numbers by the end of 2024.
Trust Bank hit a milestone of S$1 billion in deposits just last month and now has a total of 500,000 customers.
Of these, 70 per cent have come through referrals and customers clock 15 credit card transactions per month, causing card balances to grow by nearly six-fold from September last year to March 2023.
The bank is also offering an attractive interest rate on its deposit accounts for up to S$75,000 to entice more customers.
The base interest rate stands at 1.5% but if a customer makes at least five card transactions, it jumps to 2%.
NTUC union members get to enjoy an additional 0.5% interest rate for a maximum of 2.5% on their accounts.
Trust Bank aims to break even by 2025, three years from its launch in September of last year.
To do so, Sadhu points to three important criteria.
First off, Trust Bank possesses a full digital bank licence that enabled it to obtain a large customer base.
Secondly, the bank needs to ensure that its products are used regularly rather than sporadically.
Finally, he wants to engage and deepen existing customer relationships so that these customers utilise multiple Trust Bank products.
Trust Bank will be introducing instant loans and also expanding its insurance offerings while launching other products such as Saving Pots.
Saving Pots will enable customers to set aside and save money without opening a separate account.
AIMS APAC REIT (SGX: O5RU)
AIMS APAC REIT, or AAREIT, has announced the launch of an equity fund-raising (“EFR”) exercise to raise gross proceeds of approximately S$100 million.
The EFR will be conducted via a private placement and preferential offering of new units.
The issue price for the private placement has been fixed at S$1.214 per new unit while the issue price for the preferential offer is slightly lower at S$1.189 per unit.
Both issue prices are below the volume-weighted average price of S$1.301 per unit.
Around S$70 million will be raised from the private placement with the remaining S$30 million coming from the preferential offer.
Unitholders will be issued 35 new units under the preferential offer for every 100 units that they own.
Around S$32 million of the amount raised will be spent on asset enhancement initiatives (AEIs) for two of the REIT’s properties that have been identified.
The bulk of the remainder, or S$65.2 million, will be utilised for other AEIs, re-developments, or potential acquisitions.
Part of the proceeds will also be used to pay down debt.
As of 31 March 2023, AAREIT sported an aggregate leverage ratio of 36.1% and had 88% of its borrowings on fixed rates.
Existing unitholders will be entitled to an advance distribution of between S$0.017 and S$0.019 with the actual quantum to be determined and announced by the manager at a later date.
SATS Ltd (SGX: S58)
SATS released its fiscal 2023 (FY2023) earnings and the ground handler saw revenue surge in line with the resumption of air travel.
For the second half of the fiscal year (2H FY2023), revenue jumped 57.1% year on year to S$953.8 million, buoyed by increased business volumes from travel recovery and more flights handled.
The group still incurred an operating loss of S$5.7 million for the half-year but its core net profit came in at S$7.7 million, reversing the S$21.7 million net loss in the prior year.
For FY2023, revenue surged 49.4% year on year to S$1.76 billion while core net loss (excluding government reliefs) improved from S$141.1 million to S$77.8 million.
The result was negatively impacted by the acquisition professional fee relating to its Worldwide Flight Services (WFS) acquisition, higher tax expense, and the impairment of fixed assets.
SATS’ operational numbers were impressive and demonstrated the strength of the recovery in air travel.
Flights handled more than doubled year on year from 95,500 to 230,400 while passengers handled catapulted more than five-fold year on year to 52.6 million.
The airline food caterer also served up almost 32% more meals compared to FY2022 and cargo tonnage climbed almost 34% year on year to 2.2 million tonnes.
FY2024 will see SATS tapping on its WFS acquisition to enhance its competitive edge and increase its cargo handling volumes.
The group also opened a central kitchen in Tianjin during FY2023 and is in the process of constructing the largest central kitchen in Bengaluru, India, to produce ready-to-eat meals for airlines, corporates, and food service customers.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.