iFAST 1Q 2026: Why Shares Slumped 5% Despite 48% Profit Surge

Déjà vu?

A year ago, iFAST Corporation (AIY) reported strong 1Q 2025 results (net profit up 31% YoY), yet the price plunged nearly 12%.

Yesterday, history chimed in again.

iFAST reported a stunning 47.5% YoY increase in net profit to S$28.0 million, on the back of 44.5% revenue growth. Yet, instead of a victory lap, the share price retraced 5.2% to end the day at S$9.00.

So why is the market hesitant?

While I don’t have the exact answers, the following “triggers” could explain why the street is hitting the brakes.

Trigger 1: The “Expectation Beast” vs. Staff Costs

Expectation is a curious beast; it often forces investors to focus on the wrong output. Because iFAST has spent the last few quarters delivering profit growth that outpaced sales, the market has become “spoilt.”

Seeing a “mere” 47.5% jump in net profit against a 44.5% revenue surge likely felt like a disappointment to those chasing another massive beat.

It’s weird to feel disappointed with a near 50% YOY profit growth. How many companies in your portfolio—or in the entire SGX for that matter—can deliver at this velocity?

While it’s not wrong to have expectations, missing a short-term estimate is often just a speed bump on a very long highway.

The Leverage Gap: The S$38 Million Elephant

So, why did the profit not “skyrocket” further?

The answer is simple: Headcount.

For 1Q 2026, the operating leverage (the ability to grow profit significantly faster than revenue) was temporarily muted. Staff costs for the quarter surged by 83% YoY to S$38.3 million.

To put that in perspective: If staff costs had grown proportionally with revenue, you would be looking at a profit growth rate much closer to the explosive number of last quarter.

When Does the Tide Turn?

The good news is that this isn’t a permanent “bloat.” Management has clearly signaled that:

• Peak Headcount: The group’s hiring spree is expected to peak by mid-2026.
• The 2027 Pivot: Profit margins are expected to begin their structural improvement from 2027 onwards.

Trigger 2: Underwhelming Bank Performance

Management has been clear: if the HK ePension project was the growth engine from 2023 to 2025, iFAST Global Bank (iGB) is the one meant to carry the torch going forward.

However, this quarter’s numbers suggest the torch is still flickering rather than blazing, leaving investors questioning if the bank is ready for its starring role.

EzRemit: The End of “Super-Normal” Margins

The first sign of the slowdown was in the bank’s profitability. Gross profit for iGB declined 31% YoY to S$0.69 million.

CFO Terence Lin provided the necessary context here: the first half of FY2025 benefited from “higher than normal” revenue-per-transaction in the EzRemit division. We are now seeing a return to a normalised rate.

While remittance volume is higher and net interest revenue is healthy, these gains weren’t enough to bridge the gap left by the margin normalisation.

New Deposits: Growing at a Decreasing Rate

Perhaps more concerning to the market than the margins is the stalling momentum of new deposits.

While the “headline” YOY growth for deposits is an impressive 40.0% (reaching a record S$1.61 billion), the sequential momentum tells a more sobering story.

As shown in the chart, the velocity of new money entering the bank has shifted from a sprint to a crawl:

• The Peak: In 2Q 2025, iGB was pulling in S$300 million in a single quarter.
• The Current Reality: This quarter saw a net increase of only ~S$40 million.

While this S$40M is technically a “recovery” from the S$20M trough in 4Q 2025, it is a far cry from the massive six-figure surges seen during the bank’s initial years.

The Macro Headwinds

Chairman and Group CEO Mr. Lim Chung Chun acknowledged this loss of momentum, noting that quarterly numbers often fluctuate due to the interest rate environment.

As rates stabilise or decline, “lazy money” that was sitting in high-yield bank accounts is also shifting back into the stock market.

The Strategic Pivot: Scan, Pay, and Scale

To reignite growth, the group is aggressively expanding iGB’s utility.

A key example is the partnership with ANT International to launch Worldwide Scan & Pay in 2Q 2026. Powered by Alipay+, this cross-border QR feature will allow individual clients to pay at over 150 million merchants worldwide.

By transforming the bank from a passive “storage unit” for cash into an active, global payment tool, iFAST is betting that convenience will drive the next wave of deposits.

Trigger 3: S$100 Billion AUA Mission Impossible?

This leads to the centrepiece of this quarter’s briefing: the Group’s scenario planning to reach S$100 billion in Assets Under Administration (AUA) by 2030.

Management was careful to clarify that this isn’t a rigid forecast, but rather a “potential scenario” to demonstrate that the Vision 2030 target isn’t just a figure plucked from thin air. It is meant to show what is attainable with correct execution.

The Elephant in the Spreadsheet: 56.9% CAGR

What immediately jumped out to me (and maybe to the rest of the market) is the outlandish 56.9% CAGR assigned to iGB.

When you look at the recent slowdown in deposit growth I just discussed, it is genuinely hard to envision the bank’s AUA scaling from S$1.6 billion to S$15.0 billion in just five years.

For a market that prefers certainty, a growth rate that looks like a vertical line can often trigger skepticism rather than excitement.

Market Share vs. Growth Rates

However, Chung Chun offered a different and interesting lens through which to view these “impossible” numbers.

He shared that notwithstanding the percentage rate, the goal is simply to capture a S$15 billion market share from the vast global banking market.

From his perspective, S$15 billion is a drop in the ocean of global wealth.

If iGB can successfully position itself as a “Truly Global Business Model,” acquiring that sliver of the global pie becomes a matter of execution rather than a mathematical miracle.

Final Thought: Focus on the Growth Pipeline, Not the Timeline

Was I convinced by the S$100 billion slide? Honestly… not entirely.

To me, it remains a very tall order. But it is important to remember that this is only one of many potential scenarios.

As I’ve said earlier: Expectation is a curious beast that causes you to focus on the wrong output.

Whether iFAST hits exactly S$100 billion by 2030 isn’t the main point.

Obsessing over that single figure distracts you from the digital plumbing that iFAST has spent years building to scale its business.

As long as they get the execution right—more often than not—it really does not matter whether that S$100 billion AUA is achieved in 2030 or 2032.

Moreover, as Chung Chun pointed out, unexpected opportunities could still pop up during these five years.

We just have to turn back the clock five years ago:

• How many of us foresaw iFAST winning the HK ePension Project?
• Did anyone predict the UK Bank turning profitable in less than two years?

With every new license and collaboration, the “optionality” of this business increases.

I am particularly excited about the ANT International collaboration; while I personally do not need “Worldwide Scan & Pay”, there is clearly a global market for it.

And perhaps, this partnership might provide the future connections iFAST needs to turn around its China segment.

Finally, don’t forget the ongoing acquisition of Financial Alliance, the E-Money license in Malaysia, and the Shopee Malaysia partnership–iFAST is planting seeds everywhere.

Not Adding, Just Holding

With management guiding for dividends of at least S$0.105 for FY 2026, I’m penciling in an EPS of ~S$0.40 for the year. This represents a healthy 21% jump over FY 2025’s S$0.33 and puts the stock at a forward P/E of roughly 23x.

This feels like a reasonable price to pay for iFAST’s growth potential, especially considering a management team that consistently over-delivers on ‘impossible’ projects.

I am not adding to my stake at this time, though.

With my recent buys and iFAST consistently sitting in my Top 5 holdings (currently at number three), the position is already at its targeted weight. I’m staying the course and holding on for the 2027 operating leverage story.

Food for thought

Last year, the 1Q plunge saw the price hit S$6.35, yet it finished the year at S$9.52 (a nearly 50% recovery). Will history rhyme once more by the end of 2026?

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