Revolut in talks to acquire major Asian bank

I was talking to an insider friend in the Revolut empire yesterday and he implied that Revolut is in talks to acquire a major Asian bank in its expansion across the region. I asked him which bank? but he kept schtum. So, I was thinking about it and wondered if it could be DBS?

DBS operates in 19 markets across Asia, with a core focus on Southeast Asia (Singapore, Indonesia), Greater China (Hong Kong, China), and South Asia (India), and is headquartered in Singapore which is where Revolut’s Asian centre is also headquartered.

As you’ll know from this blog, the bank has campaigned for over a decade to become truly digital and is highly respected in the region.

The thing is that DBS has over 40,000 employees and a market valuation of over SGD$160 billion (USD$125 billion) which is far more than Revolut’s latest valuation, so that’s a no go.

Could it be one of the major challenger banks in Asia, of which there are many. The key ones I would list are the big Chinese heavyweights of WeBank and MYbank; Kakaobank in South Korea; Rakuten Bank, Sony Bank, Jibun Bank, and PayPay Bank in Japan; or BigPay (Malaysia), and Timo (Vietnam).

Then there are lots of other choices as many banks in Asia are struggling to continue growth strategies due to the property sector debt crises, slowing economic growth, and rising non-performing loans (NPLs). This is particularly true in China and Southeast Asia.

I was also thinking about the fact that Revolut has no operations in China for domestic citizens. Tourists and foreigners can use their services in China, but that would be a massive move towards Revolut growing into a global platform if they could acquire a Chinese bank, many of which are struggling due to high volumes of "zombie" developers and bad loans. For example, Jiangxi Bank of China failed in 2024, reflecting the deep crisis among regional lenders.

But why would a digital-first innovating company aiming to go global want to buy a bank in China that has huge debts? Well, just for that reason: to go global. The thing is that I doubt the Chinese government would approve any acquisition without major challenges. Challenges that could take even longer than getting a banking license in the UK.

So, who could it be?

Maybe Panin Bank in Indonesia?

Owned by the Gunawan family, ANZ built up a large stake in the bank and currently owns 39.2%. But they’ve been looking to sell that since 2013. That’s a long time.

But why does ANZ want to sell?

It is all about a change of strategy to focus on its core domestic market and they want to simplify the business, exit low-return minority investments, and strengthen the bank’s capital position. Add to this that the Gunawan family have a major stake and influence, it does not fit culturally. Add to this that it still leaves the challenges of how to get pan-Asian banking licenses in a fast-track, and it does not seem a likely target.

So, who would be the target?

IMHO, the most likely one would be GXS Bank in Singapore, as that fits with the focal point of Revolut’s plans.

GXS Bank is a Singapore-based digital bank backed by a Grab and Singtel consortium. Launched in 2022, it is a fully digital "neobank" focusing on individuals and small businesses, particularly gig economy workers and early-jobbers.

But again there are issues here as the bank is loss making, and has minimal revenues (USD$22 million in 2024). However, the advantage might be that it would give Revolut a banking license for a small amount, and a fit with their own image of being a digital-first bank. Bear in mind that Revolut does not have a full banking license in Singapore. Instead, Revolut operates under a Major Payment Institution (MPI) license regulated by the Monetary Authority of Singapore (MAS), which allows them to offer e-money services, currency exchange, and transfers, but they cannot take deposits or offer lending products directly and, as exemplified by their five years struggle to get a banking license in the UK, acquiring GXS bank would give them a quick start to full banking.

GXS Bank holds a banking license in Singapore, authorised by the Monetary Authority of Singapore (MAS), so that could be a reason, but then I ask myself: what advantage does this give Revolut? as they would still need to get licenses in all the other Asian territories. Having said that, GXS Bank does have a digital banking license in Malaysia and operates as a bank through Superbank in Indonesia.

My bet, after writing the above, is GXS Bank is a good target ... but could they Grab it?