(Yicai Global) March 28 -- The virtual digital retail bank SC Digital Solutions got the green light to operate a virtual bank from the Hong Kong Monetary Authority yesterday, one of the first three virtual banks to get licenses.
Standard Chartered Bank (Hong Kong), information and communications technology company PCCW, telecom HKT Trust and HKT Limited and Ctrip Financial Management (Hong Kong) jointly formed the digital bank last year in the special administrative region, which announced the scheme in early 2018.
PCCW shares [HK:06823] rose 0.32 percent on the news to HKD12.54 (USD1.60) and Standard Chartered [HK: 2888] inched up 0.33 percent to HKD60.50 (USD7.70) in morning trading. Ctrip [NASDAQ:CTRP] closed up 3.73 percent at USD42.31.
The new sector is projected to eventually claim a 30 percent share of the financial services market, Bloomberg News reported.
Standard Chartered will hold 65.10 percent in the joint venture, according to their joint statement released yesterday, while PCCW, HKT and Ctrip Finance will hold 10 percent, 15 percent and 9.9 percent, respectively.
The board has nine seats, comprising six members and three independent non-executive directors, subject to regulatory approvals.
Standard Chartered will take four seats with Mary Huen, chief executive of Standard Chartered (Hong Kong Limited), as chair and Deniz Guven as chief executive. He has stepped down as Standard Chartered's senior managing director and global head of digitization. Ctrip and HKT will each take one seat.
The online bank will integrate its founders' customer bases to provide combined customized one-stop financial, telecom, entertainment and travel services to clients on a single platform. Opening accounts and plying financial transactions can all be done remotely.
The HKMA also granted the Ant Financial arm of Alibaba Group Holding and Tencent Holdings-backed Zhongan Virtual Finance and Livi VB -- a joint venture company set up by Bank of China Hong Kong, JD Digital and Jardine Matheson, controlled by BOC Hong Kong -- virtual bank licenses yesterday, thus confirming earlier market rumors.
The three are expected to start operating within three to six months, said Yuen Kwok Hang, HKMA's deputy chief. The HKMA is reportedly poised to grant five more licenses from among the initial 29 applications reportedly received.
Editor: Ben Armour