ZA Bank becomes Hong Kong’s first virtual lender to report a monthly profit
The city’s largest online-only bank reported a monthly profit in July, its first after nearly four years of operations
ZA Bank, Hong Kong’s largest virtual lender, has become the first among the eight online-only banks to make a monthly net profit since launching in 2020, aided by growing deposits and fee income from its newly launched mutual fund and US stock trading business.
“After four years of operation, ZA Bank has achieved a net operating profit, a milestone in the development of digital banking in Hong Kong,” Calvin Ng Chung-ho, alternate CEO of ZA Bank, said in an interview.
Ng said the profit, which came in July, was driven mainly by higher interest income. It was also helped by an increase in deposits, which rose 70 per cent from a year earlier to HK$16.8 billion (US$2.15 billion) at the end of June. Loans grew in the single digits, Ng added, without giving details.
The net interest margin – the gap between the cost of funding and lending rates – widened to 2.21 per cent in the first half, compared with 1.87 per cent a year earlier.
Ng said the bank also earned more fee income from the sale of its mutual fund and insurance products to retail investors in the first half, as well as from the launch of US stock trading services. ZA Bank has 800,000 customers, the most among the eight virtual banks.
Looking ahead, Ng said the bank plans to launch campaigns to compete for clients to shift their payroll accounts to the lender when the Faster Payment System (FPS) supports more payroll services. FPS allows registered users to transfer money between different banks with the use of a simple identifier, such as a phone number.
