DBS Group Research is keeping its “buy” recommendation on Singtel with a target price of $2.69, as analyst Sachin Mittal believes that the Singtel and Grab joint venture is a strong candidate for a full digital banking license.

In this JV, Singtel owns 40% of the the JVCo, while ride-hailing and payments platform Grab owns the remaining 60%. To that end, Singtel is expected to have to commit over $600 million in total to the JV in the long term.

To recap, the Monetary Authority of Singapore (MAS) announced last year June that it would grant up to five digital bank (DB) licences – two digital full bank (DFB) licences to provide financial services and allow deposits to be taken from retail customers and three digital wholesale bank (DWB) licences may be issued, catering to small- and medium-sized enterprises (SMEs) and other non-retail segments in Singapore.

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