Tonik posts Q1 income, 1st standalone digital lender in PHL to turn profitable

TONIK Digital Bank, Inc. said it turned profitable in the first quarter, becoming the first nonecosystem-backed digital lender in the Philippines to post a net income, driven by growth in consumer lending, deposits and artificial intelligence (AI)-led risk management.

“We are now the only player that is both cleanly profitable and structurally positioned with a digital bank deposit license to scale into the $50-100 billion credit gap,” Tonik founder and Chief Executive Officer Greg Krasnov said in a statement posted on Tonik’s website.

The digital lender said its Singapore-based parent company posted consolidated positive cash net income, including costs tied to credit risk, five years after launching operations in February 2021.

Tonik attributed its profitability to its focus on consumer credit for underserved Filipinos, noting that revenue generated from a lending customer is significantly higher than from a payment client.

As of April, Tonik’s loan portfolio had more than doubled to $110 million (P6.8 billion) from a year earlier.

The company also posted an annualized revenue run rate of more than $60 million, with lending accounting for 99% of revenue.

Tonik reported a net interest margin of 51% and a lending risk-adjusted return on capital of 25%. Its loan-to-deposit ratio stood at 82% as of April, which it said was the highest among digital banks in the country.

The bank said growth was supported by its AI-driven credit underwriting system, which enabled it to lend profitably to thin-file borrowers while managing credit risks.

Its lending portfolio includes salary-deduction loans through employers, merchant installment financing and digital personal loans.

“These channels provide structural risk mitigation supporting de-risked unit economics,” Tonik said.

Following its return to profitability, the company said it no longer expects to rely on external subsidies to support expansion.

In the near term, Tonik said it would focus on expanding employer-channel lending under its Tendo brand, broadening its merchant network and improving revolving credit products.

The company also said ecosystem-backed digital banking models, while useful for accelerating early growth, might face long-term scalability constraints.

Tonik became the third digital bank licensed by the Bangko Sentral ng Pilipinas to achieve profitability, after Maya Bank, Inc. and Overseas Filipino Bank, Inc.

Other BSP-licensed digital banks include GoTyme Bank, UnionDigital Bank, Inc. and UNObank, Inc. — Aaron Michael C. Sy