Hong Kong’s first digital bank offers 6% rate that dwarfs HSBC’s

The first of Hong Kong’s new generation of digital banks has announced its arrival with a 6 per cent introductory rate for deposits.

ZA Bank, one of eight firms preparing to start digital-only banks in Hong Kong, has begun a trial run that pays a select group of depositors over 3 percentage points more than banks such as HSBC Holdings Plc and Standard Chartered Plc.

Though many doubt the new banks well be able to maintain such rates, the offer is a warning of upcoming competition for the city’s $410 billion local currency time-deposit business. “This is more of a gimmick, which shouldn’t become a norm,” said Terry Siu, treasurer at CMB Wing Lung Bank, which pays 3.8 per cent to new savers for two-month Hong Kong dollar deposits.


“But competition for funds is indeed getting higher as eight more banks are coming out.” ZA began a pilot last month for the city’s first digital-only bank. It’s offering the 6 per cent rate for three-month Hong Kong dollar deposits capped at Hong Kong$200,000 ($25,000), according to a person with knowledge of the matter.