First virtual bank raises the bar with 6pc rate offer

Business | Bloomberg 13 Jan 2020

The first of Hong Kong's new generation of digital banks has announced its arrival with a 6 percent introductory rate for deposits.

ZA Bank, one of eight firms preparing to start digital-only banks in Hong Kong, has begun a trial run that pays a select group of depositors over 3 percentage points more than banks such as The Hongkong and Shanghai Banking Corporation and Standard Chartered Bank (Hong Kong).

Though many doubt the new banks will be able to maintain such rates, the offer is a warning of upcoming competition for the city's US$410 billion (HK$3.2 trillion) local currency time-deposit business.

ZA is offering the 6 percent rate for three-month Hong Kong dollar deposits capped at HK$200,000, according to a source. The accounts are set at a 2 percent rate, but offer a top up of as much as 4 percent to select clients. Standard Chartered, HSBC and BOC Hong Kong (2388) pay 1.9 percent to 2.3 percent for the maturity.

The new banks will find it difficult to make inroads into the loan market, grabbing just a 1.5 percent share by 2025, since they will be held back by challenges in attracting deposits and high costs for interbank funding.

Search Archive

Advanced Search
January 2020
S M T W T F S

Today's Standard



Yearly Magazine

Yearly Magazine