Boost group chief executive officer Sheyantha Abeykoon.
KUALA LUMPUR: Axiata Group Bhd
fintech arm Boost Holdings Bhd is paving its way to profitability with its over-seven-year-old e-wallet business expected to be in the black by this year.
Its digital bank, a 60:40 joint venture with RHB Bank Bhd, is anticipated to breakeven within three-to-five years.
Group chief executive officer Sheyantha Abeykoon said Boost’s business is nearing profitability, with its burn rate now under RM1mil.
“This year will be the year, on a run rate basis, we will move into the black.
“In terms of the original (profitability timeline) curve we had, we are probably about 12 months behind, if I’m honest.
“But in terms of the direction of the curve, we are there,” he told the media yesterday during the group’s 2024 year-end wrap-up presentation.
In 2024, Boost’s gross transaction value (GTV) exceeded RM5.6bil compared to RM4.9bil recorded in 2021, which was more than double the GTV in 2019 and 30% higher than 2020.
According to Sheyantha, its digital bank business is on track to meet Bank Negara’s stipulated three-to-five year breakeven period for digital banks.
The digital banking platform that launched in June 2024 as Malaysia’s first homegrown digital bank has already secured over RM700mil in deposits within six months.
This was thanks to its seamless integration with the Boost e-wallet, which facilitates an embedded banking experience for its two million active users.
Notably, Sheyantha said 80% of Boost Bank’s users transitioned from the Boost app.
“If you look at the deposits, it’s probably two times what we had anticipated and what we wanted to achieve.
“That’s not an insignificant achievement,” Sheyantha pointed out.
He added that partnerships with retail giants such as Mydin, CKS Retail, Servay, Bataras and CelcomDigi have contributed significantly, accounting for 40% of Boost Bank’s deposits.
Boost’s lending solutions have also gained traction with its syariah compliant buy now, pay later product Boost PayFlex, which has disbursed over RM240mil to more than 121,000 customers since its launch.
Sheyantha said the company’s lending strategy began with micro, small, and medium enterprises (MSMEs) before expanding into consumer lending.
“When we started, we intentionally focused on MSMEs because it was more palatable to regulators and addressed a real need. Over time, we leveraged this expertise to responsibly score and lend to consumers.”
Amid concerns about Malaysia’s high household debt-to-gross domestic product ratio, he said Boost has implemented stringent credit scoring to ensure customers have the capacity to repay.
“We aim for profitable and responsible growth. Balanced growth in lending is key,” Sheyantha added.
While Boost’s deposit costs are higher due to competitive deposit rates, Sheyantha said its focus on unsecured lending with higher interest rates is offsetting these costs.
“Our net interest margins are two-to-three times higher than those of traditional banks.”
Reflecting on the over seven-year journey, Sheyantha said: “Last year was the year we completed the Boost journey.
“From micro payments and lending to launching a full suite of financial services, our vision has become a reality.”
Boost’s ambition is to extend beyond Malaysia.
Sheyantha said the company is replicating its financial inclusion model in other Asean markets, including Indonesia and Cambodia.
“The problem of underserved customers is not unique to Malaysia.
“The opportunity to address financial inclusion is vast across Asean and South Asia.”
Furthermore, Boost is leveraging Axiata’s regional footprint to accelerate its expansion.
