Despite offering an above-market deposit rate of 6.8 percent in Hong Kong, ZA Bank, one of eight firms preparing to start digital-only banks, said it has no intention to extend the offering.
The attractive rates, which is some four percentage points higher than established firms, drew almost 20,000 applicants, the virtual bank said. However, only about 2,000 people will be selected as initial customers, and 100 getting the highest three-month rate as a one-time deal.
Going forward, it will pay rates mostly in line with the market. «This is a reasonable deposit rate level for new funds as we’ve run the numbers. Our aim isn't to start the business with disruptive pricing,» said Rockson Hsu, chief executive officer of ZA Bank, who was quoted in «Bloomberg»(behind paywall). The offer is also capped at HK$100,000 ($13,000), the bank said.
Branch-less Edge
Observers are watching if the new virtual banks will be able to gain a reasonable market share with their attractive offers. The digital-only bank is rolling out its services at a time when about 30 percent of the city’s bank branches have shut in order to curb the spread of the virus.
Meanwhile, incumbent banks are stepping in with relief measures by cutting fees and extending loan periods to both businesses and consumers.
