ZA bank, a unit of China’s ZhongAn Online P&C Insurance Co. began operating on Tuesday, it said in a statement, the first of Hong Kong‘s new online-only banks to do so.
Hong Kong last year issued eight so-called virtual banking licences to companies including Alibaba affiliate Ant Financial, and consortia involving Standard Chartered and Tencent.
The new banks could be the biggest shake-up in years to Hong Kong‘s profitable retail banking sector, dominated by old-guard lenders such as HSBC, Bank of China (Hong Kong) and Standard Chartered.
When the new licences were issued in March and April last year, the Hong Kong Monetary Authority said it expected the banks to begin operating in six to nine months.
Launches were delayed by anti-government protests and operational difficulties, Reuters reported last year.
ZA bank’s services, the statement said, include lending and a deposit account with an annual interest rate of 1% – traditional players in Hong Kong, such as HSBC offer 0.001% on Hong Kong dollar savings deposits.
The launch comes as Hong Kong authorities and businesses grapple with the effect of the new coronavirus. On Monday, Hong Kong stopped all tourist arrivals and transit passengers at its airport in a bid to halt the virus’ spread.
Other Asian markets including Singapore, Malaysia and Taiwan have issued, or plan to issue new online banking licences.