When it comes to digital banking, the Philippines has found its champion in Tonik. This trailblazing neobank has set the financial world abuzz with its remarkable achievements and steadfast commitment to making bank credit accessible to all Filipinos. With a market-leading growth in its consolidated loan portfolio and revenue in the first half of 2024, Tonik is not just a digital bank; it's a financial revolution.
In 2023, Tonik achieved a monumental milestone by becoming the first non-captive digital bank in the Philippines to reach positive lending unit profitability across its three lending product lines: Salary Loans, Shop Installment Loans, and Cash Loans. This was no small feat and set the stage for exponential growth in the following year.
By June 2024, Tonik's new loan production had skyrocketed by an astounding 133% year-on-year. This exceptional growth in loan production subsequently led to a 94% expansion in Tonik's loan portfolio over the same period. To put this in perspective, Tonik's consumer loan portfolio growth rate far surpassed that of the digital bank sector, which grew by just 10%, and the broader banking sector's consumer loans, which increased by 18%. Clearly, Tonik is not just keeping pace with the industry; it's setting the standard.
Tonik's financial achievements don't stop at loan production and portfolio growth. The Annualized Revenue Run Rate (ARR) at the end of Q2 2024 reached a staggering USD 19 million, driven by a 78% year-on-year increase in lending income. This substantial growth has also led to a notable reduction in cash burn, providing strong visibility to Tonik's path to profitability, which is expected in 2025.
This path to profitability is not just a financial strategy but a testament to Tonik's operational efficiency and relentless focus on credit risk management. By making prudent financial decisions and optimizing their operations, Tonik is well on its way to becoming a sustainable and profitable digital bank.
As the holder of the #1 digital bank license in the Philippines and the best-funded fintech startup in the country with over $160 million raised, Tonik has made it its mission to make bank credit accessible to all Filipinos. The banking sector in the Philippines allocates only 14% of its total loan portfolio to household consumption, which is the lowest level in relation to GDP compared to most other Southeast Asian countries. This market supply dislocation represents a $50 billion credit inclusion market, and Tonik is poised to capitalize on this opportunity as the first mover.
Tonik's impressive scale-up has resulted in the onboarding of over 1.5 million customers to-date, with a high retention rate of over 40% for repeat loan offers. This speaks volumes about Tonik's ability to not only attract but also retain customers, further solidifying its market leadership.
One of Tonik's most compelling competitive advantages is its unwavering focus on customer experience (CX) and customer service. In the first half of 2024, Tonik's dedication to CX has been recognized by a multitude of prestigious awards, including:
- Top 10 CX among Digital Banks globally (AlternaCX)
- Best Digital Bank CX in the Philippines (The Digital Banker)
- Most Innovative Digital Bank in the Philippines (Global Banking and Finance Review)
- Digital Bank of the Year in Southeast Asia (APAC Insider)
- Virtual Bank of the Year – Philippines (Asian Banking and Finance Retail Banking Awards)
Greg Krasnov, Founder and CEO of Tonik Digital Bank, eloquently summarized Tonik's philosophy: "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 in the mass market consumer lending/credit inclusion segment."
Tonik's exceptional results in the first half of 2024 are a strong validation of the 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, Tonik is leading the way in digital banking. More importantly, it's making a real difference in people's lives.
As Tonik continues to innovate and expand, the future looks incredibly promising. The neobank's relentless focus on operational efficiency, customer experience, and financial inclusion ensures that it will remain at the forefront of the digital banking revolution in the Philippines and beyond.
In conclusion, Tonik's journey is a testament to what can be achieved with vision, dedication, and a relentless pursuit of excellence. Here's to Tonik, the Philippines' trailblazing digital-only neobank, and its mission to make bank credit accessible to all Filipinos. The financial landscape in the Philippines will never be the same, and that's a good thing.
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