Tuesday, July 07, 2020

Four more allowed virtual banking in Hong Kong

May 13. 2019
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By CHINA DAILY
ASIA NEWS NETWORK
HONG KONG

TENCENT Holdings and Alibaba Group Holdings affiliate Ant Finance Services Group have received virtual banking licences in Hong Kong.

The move comes after the pair failed to make the first batch of licensees.

The Hong Kong Monetary Authority (HKMA) said it has granted virtual banking licenses to four new entities: Ant SME Services (Hong Kong), Ping An OneConnect, Infinium and Insight Fintech HK.

Ant SME is a unit of Ant Financial, while Ping An OneConnect is a member of Ping An Insurance Group, the country's second-largest insurer in terms of premiums.

Infinium is a joint venture backed by Tencent, Industrial & Commercial Bank of China (Asia), Hong Kong Exchanges & Clearing, Hillhouse Capital, and Hong Kong businessman Adrian Cheng.

Insight Fintech is a joint business between Chinese mainland smartphone maker Xiaomi and Hong Kong-based asset management company AMTD.

“Ant Financial has long been committed to bringing equal opportunities to consumers and small and medium-sized enterprises with its technological expertise.

“We are looking forward to joining hands with communities in Hong Kong to pave the way for the development of financial technology and inclusive finance in the city,” Ant Financial said in a statement.

The four newly licensed virtual banks are scheduled to offer services within six-to-nine months, the city's de facto central bank said in the statement. This brings the total number of virtual lenders in Hong Kong to eight.

Buoyed by the news Tencent's shares soared more than three per cent to peak at HK$387.8 in the morning session. Its share price closed Friday's trading at HK$380.40, up 1.28 per cent.

The flagship Hang Seng Index edged up 0.84 per cent, or 239.17 points, to finish at 28,550.24 points.

It is thought that the granting of the virtual banking licences will make the financial centre a battlefield for the Chinese mainland’s ambitious financial technology firms.

Back in March, JD.com’s tech arm JD Digits and ZhongAn Online P&C Insurance were among the first licensees.

For the past couple of months, HKMA has not granted new banking licences.

Compared with the potential HK$20-40 billion cost of acquiring a bank licence in the city, the minimum capital threshold of HK$300 million for virtual lenders has lowered the bar for financial technology players to join the game.

 

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