Tonik posts strong end-June results

TONIK Digital Bank, Inc. reached an annualized revenue run rate of $19 million (about P1.114 billion) as of end-June, driven by higher loan income, it said on Tuesday.

This puts the digital lender on track to reach profitability by next year, Tonik said in a statement.

“While metrics such as deposits, number of transactions, or customer count are important, these are all loss-generating activities, and therefore they do not capture the essence of a profitability strategy of a digital bank. At the end of the day, a bank needs to become profitable, and in a market like the Philippines, that is only possible through aggressively solving for unit profitability and growth on mass market consumer lending and credit inclusion segment,” Tonik Founder and Chief Executive Officer Greg Krasnov said.

“Our exceptional 1H 2024 results are a strong validation of our team’s revolutionary efforts to make mass market consumer lending in the Philippines profitable and massively scalable within the framework of a regulated deposit-taking bank institution and on the basis of a digital-first platform. We’re leading the way in digital banking, and we’re proud to be making a real difference in people’s lives,” he added.

Tonik’s lending income grew by 78% year on year, it said.

Its loan production more than doubled, growing by 133% year on year at end-June.

“This exceptional production growth led to Tonik’s loan portfolio, expanding by 94% in the twelve months ending June 2024,” Tonik said.

Mr. Krasnov previously said Tonik expects to triple its loan disbursements this year.

The lender said its end-June performance has resulted in the onboarding of over 1.5 million customers to date.

The digital bank noted that its consumer loan portfolio growth outpaced the sector’s 10% average. It also surpassed the 18% growth in the broader banking sector’s consumer loans, it added.

“Loans for household consumption account for only 14% of the total loan portfolio of the banking sector in the Philippines and are at the lowest level in relation to GDP (gross domestic product) compared to most other Southeast Asian countries. This market supply dislocation represents a $50-billion credit inclusion market, and a multibillion-dollar balance sheet opportunity for Tonik as the first mover in this sector,” the lender said.

Tonik has raised over $160 million for funding since it launched in March 2021.

It is one of the six digital banks licensed by the Bangko Sentral ng Pilipinas to operate in the country. — AMCS