ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

In Equity Sales and Research for more than 25 years covering Asian markets. Possesses in-depth knowledge of a wide range of companies, economies, and markets in Asia. Over his career, he has specialised in HK/China and ASEAN markets at various different Investment Banks, most recently heading equities in Indonesia for Bank of America Merrill Lynch in Jakarta for more than three years. Whilst in Jakarta, he produced a well-read daily and weekly product on the Indonesian market, which included company visits, as well as political, economic and sector commentary. A former racing skier, who enjoys ultra-marathons and surfing in his spare time.

ASEAN Insight Provider

The Week That Was in ASEAN@Smartkarma - Sea Ltd's Knockout, Grab's Progress, and the Avian IPO

CrossASEAN Digital - All Rise Indonesia's Digital Banks

PT Bank Central Asia (BBCA IJ) - The Future Is Blu

Gravity Works As WeWork Doesn't; Now Plan B

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Thematic (Sector/Industry)

Malaysia Diversified financials / Thematic (Sector/Industry)

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There have been ongoing signs that the competition within the digital finance space is starting to reach a hiatus as it moves up a gear both for the existing banks, as well as the digital economy players including GoTo, <a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab</a>, and Shopee (<a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a>).  
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Competition between digital banks and conventional banks has started to heat up in Indonesia and is only going to accelerate the digitization trend in the industry. In August, some digital banks were offering interest rates of 7% - 8% on current account deposits.
<a href="https://www.smartkarma.com/entities/bank-jago-tbk-pt" target="_blank" data-smartkarma-citation="entities:31094:1" rel="noopener">Bank Jago Tbk PT (ARTO IJ)</a> recorded a sevenfold annual increase in credit lending in 1H2021 and the bank plans to jack up its lending further through partnerships with peer-to-peer (P2P) lenders and multi-finance companies,
While some of these new digital banks might seem small compared to major established lenders, their ecosystem support and a steady stream of funding from big tech will make them potentially a formidable foe to the conventional banks.
Digitalization in the banking industry is inevitable and it is likely that the use-case for conventional and digital banking are likely to converge in a number of areas as digital banks become the new normal. 
We expect digital banking to be initially focused on consumer banking and SMEs and do not expect any major infringement into corporate banking, which still makes up the majority of the larger bank's business
Another very interesting area currently is the rapid pace of development and movement within the digital payments landscape in Indonesia.
There is little doubt that <a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab</a> is looking for partners to push out its digital finance aspirations. This may involve taking a stake in a smaller bank potentially with its partner <a href="https://www.smartkarma.com/entities/elang-mahkota-teknologi-tbk" target="_blank" data-smartkarma-citation="entities:7752:1" rel="noopener">Emtek (EMTK IJ)</a> to transform it into a digital bank.
We continue to favour <a href="https://www.smartkarma.com/entities/bank-rakyat-indonesia-persero" target="_blank" data-smartkarma-citation="entities:484:1" rel="noopener">Bank Rakyat Indonesia Persero (BBRI IJ)</a> and <a href="https://www.smartkarma.com/entities/bank-negara-indonesia-persero" target="_blank" data-smartkarma-citation="entities:8285:1" rel="noopener">Bank Negara Indonesia Persero (BBNI IJ)</a> in the sector. We also take a positive view of <a href="https://www.smartkarma.com/entities/bank-central-asia-tbk-pt" target="_blank" data-smartkarma-citation="entities:440:1" rel="noopener">Bank Central Asia (BBCA IJ)</a> as a core holding and rank its digital banking services the highest amongst the banks at this time.


There have been ongoing signs that the competition within the digital finance space is starting to reach a hiatus as it moves up a gear both for the existing banks, as well as the digital economy players including GoTo, Grab, and Shopee (Sea Ltd (SE US)).  

Competition between digital banks and conventional banks has started to heat up in Indonesia and is only going to accelerate the digitization trend in the industry. In August, some digital banks were offering interest rates of 7% - 8% on current account deposits.
Bank Jago Tbk PT (ARTO IJ) recorded a sevenfold annual increase in credit lending in 1H2021 and the bank plans to jack up its lending further through partnerships with peer-to-peer (P2P) lenders and multi-finance companies,
While some of these new digital banks might seem small compared to major established lenders, their ecosystem support and a steady stream of funding from big tech will make them potentially a formidable foe to the conventional banks.
Digitalization in the banking industry is inevitable and it is likely that the use-case for conventional and digital banking are likely to converge in a number of areas as digital banks become the new normal. 
We expect digital banking to be initially focused on consumer banking and SMEs and do not expect any major infringement into corporate banking, which still makes up the majority of the larger bank's business
Another very interesting area currently is the rapid pace of development and movement within the digital payments landscape in Indonesia.
There is little doubt that Grab is looking for partners to push out its digital finance aspirations. This may involve taking a stake in a smaller bank potentially with its partner Emtek (EMTK IJ) to transform it into a digital bank.
We continue to favour Bank Rakyat Indonesia Persero (BBRI IJ) and Bank Negara Indonesia Persero (BBNI IJ) in the sector. We also take a positive view of Bank Central Asia (BBCA IJ) as a core holding and rank its digital banking services the highest amongst the banks at this time.

Bank Tabungan Pensiunan Nasional (BTPN IJ)

CrossASEAN Digital Economy - The Gloves Are off in Digital Finance?