Hong Kong online banks to spread wings, offering business loans and wealth management Toggle share menu
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The Hong Kong skyline is seen from The Peak. (Photo: Reuters/Bobby Yip)
23 Dec 2020 07:17PM (Updated:
23 Dec 2020 07:20PM) Share this content
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HONG KONG: Hong Kong s new online-only banks plan to venture into business lending and wealth management, seeking more lucrative avenues beyond basic savings accounts and transfer services, senior executives said.
Eight such banks started this year, and as of November had taken more than US$1 billion in deposits and attracted nearly 300,000 customers.
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Whether these banks can take a significant share from Hong Kong stalwarts such as HSBC and Standard Chartered and become profitable is being closely watched in other Asian markets, where regulators are also encouraging new challengers.
HK online banks to diversify into lending, wealth management
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Hong Kong‘s new online-only banks plan to venture into business lending and wealth management, seeking more lucrative avenues beyond basic savings accounts and transfer services, senior executives said.
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Neobank Xinja blames COVID for pulling plug on Australia
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Neobank Xinja blames COVID for pulling plug on Australia
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Neobank Xinja has blamed COVID-19 and a tough capital raising environment for its decision to exit banking in Australia and focus on its US share trading platform.
Xinja announced on Wednesday it would close all bank accounts, refund customer savings and hand back its banking licence after what has been a challenging year for the company.
The bank s chief executive, Eric Wilson, told customers via email it had been an incredibly tough call to terminate banking services. But after COVID19 and an increasingly difficult capital-raising environment affecting who is willing to invest in a new bank, we are convinced that the best thing is for Xinja is to pivot away from being a bank.
And there they go. Few Banking Day readers will be surprised.
Radioactive from the day they launched a wildly overpriced high yield account, the board of Xinja Bank were sinking their own boat.
At 2.25 per cent the Stash Account was best-in-market and the hot money flowed.
Millennials, the core target market, were as open-minded as expected and the customer list and deposit holdings soared.
So in no time at all the board yelled STOP.
The maths was against them. Pay 2.25 per cent on your liabilities - and earn way, way less on your own deposits in a market where the cash rate (in February) was 50 basis points and money market rates even less – well, then most of every dollar in new capital will be shredded.