Paramount may hold up to 30% stake in consortium bidding for digital banking licence

By Ahmad Naqib Idris

Paramount Corp KUALA LUMPUR (Sept 6): Paramount Corp Bhd intends to hold up to a 30% stake in the consortium that is bidding for one of five digital banking licences which Bank Negara Malaysia (BNM) will be granting next year.

Speaking at the virtual briefing, Paramount group chief executive officer (CEO) Jeffrey Chew noted that each member of the consortium would hold up to a 30% equity stake in the event that it manages to acquire a licence from the central bank.

Asked if Paramount would eventually increase its stake in the venture, he said that it would be difficult to go beyond a 30% stake given BNM’s rules under the Financial Services Act which does not allow one party to have more than 30% control.

To recap, other members in the consortium are Star Media Group Bhd, RCE Capital Bhd, Prosper Palm Oil Mill Sdn Bhd and a technology partner which has not been revealed to the public.

Chew explained that the technology partner in the consortium had requested to keep “a low profile”, assuring that the company has relevant experience in the digital banking segment.

He highlighted that each member of the consortium had their roles to play — Star Media’s capabilities as a media house for advertising and branding; RCE Capital’s financial stability and track record; and Prosper’s involvement in the agriculture and food sector where Chew said there are lots of gaps in the underserved and unserved segment.

Paramount, on the other hand, brings its fintech experience to the table by virtue of its 30% stake in peer-to-peer (P2P) lending platform Fundaztic, he added.

BNM will announce the list of winners of the five digital banking licences in the first quarter of next year (1Q22).

For the foreseeable future, Chew said property development will remain as the main core business of Paramount.

He also noted that the group’s financial performance would be hampered in the subsequent quarter amid the Covid-19 pandemic and the ensuing lockdowns.

“We do see ourselves expanding regionally, doubling up every three to five years if the market is good for the property business. It may not be the most profitable business in Malaysia, but it is profitable if you do it right,” he said.

In terms of launches in the second half of 2021 (2H21), about 68% or RM646 million of its launches comprise high-rise projects, while the remainder would be made up of landed projects.

About 43% of these launches are new projects, while the rest are launches under existing projects. In total, the group expects to launch projects worth RM944 million in gross development value (GDV) in 2H21.

Paramount was half a sen or 0.6% higher at 79 sen at today’s noon market break, giving a market capitalisation of RM489.17 million.
Edited by Kathy Fong
As published: The Edge