|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's Range||68.78 - 69.18|
|52 Week Range||64.20 - 91.79|
|Beta (5Y Monthly)||1.41|
|PE Ratio (TTM)||9.19|
|Forward Dividend & Yield||2.78 (4.08%)|
|Ex-Dividend Date||Sep 22, 2019|
|1y Target Est||N/A|
BOC Hong Kong (Holdings) Limited (HKG:2388) saw significant share price movement during recent months on the SEHK...
A number of Hong Kong banks including HSBC and Standard Chartered have rushed to introduce measures to relieve the pressure on small and medium-sized businesses and individuals as the coronavirus outbreak threatens to further derail the city's embattled economy.The measures, which include waiving fees and letting customers pay just the interest on loans, come as industries such as restaurants, retail and tourism take a huge hit from the health crisis. Months of anti-government protests and the effects of the trade war had already dealt them a massive blow.The city's lenders have previously offered large-scale relief measures, during the Sars (severe acute respiratory syndrome) outbreak in 2003 and the Asian financial crisis in 1998. Insurers offer special payouts to patients hospitalised or quarantinedChina Citic Bank International will offer 24-month loans of HK$80,000 or HK$150,000 each to small and mid-sized businesses with a promise to approve eligible applications within five days, it announced on late Friday. Borrowers only need to service the interest in the first year, before the principal plus interest repayments kick in from the 13th month, it said.The Bank of East Asia will allow customers to apply for repayment of just the interest on their loans and debt restructuring, according to a spokeswoman."We understand the coronavirus outbreak has made life difficult for many or our individual and corporate customers. As a result, we have been offering relief measures to help customers. The measures will depend on their individual needs and will be determined on a case-by-case basis," she said.Hang Seng Bank, a subsidiary of HSBC, has tasked its team of commercial customer relationship managers to contact its customers to find out how it can help them."Besides mortgage borrowers, Hang Seng Bank will allow commercial customers to repay only the interest on their trade finance, corporate loans and property loans," a bank spokeswoman said in a statement.For small and medium-sized enterprise (SMEs), Hang Seng will waive application fees if they apply for a loan online before June 30. It will also pay the first-year guarantee fee for customers joining the Hong Kong Mortgage Corporation's SME Financing Guarantee Scheme. The scheme allows SMEs to borrow up to HK$15 million at a low-interest rate in return for a guarantee fee every year. Hong Kong restaurant operator is next to cut salaries of board members, management as fewer diners eat out amid coronavirus outbreakThe three local lenders rolled out their measures on Friday, after the three note-issuing bank " HSBC, Standard Chartered and Bank of China Hong Kong announced theirs on Thursday.Their offers of help come as Hong Kong's economy faces a double-whammy from the coronavirus emergency and months of violent civil unrest. Before the viral outbreak, the government had already estimated its first fiscal shortfall in 15 years, for 2019-20.Financial Secretary Paul Chan Mo-po warned on Sunday that the economy could shrink again in 2020 after falling 1.2 per cent in 2019 as the health crisis prevents tourists from visiting and many locals avoid going out to shop or dine.The city's main airline, Cathay Pacific, has asked staff to take unpaid leave, and many restaurants and hotels are following suit. Some smaller restaurants and shops are struggling to survive.Law Chi-kwong, the Secretary for Labour and Welfare, said last month that the unemployment rate would hit 4 to 5 per cent this year, up from the existing 3.3 per cent, with more shops expected to go out of business after Lunar New Year.He said his estimate was similar to that of 2003 when Sars wreaked havoc in the city.The deadly coronavirus disease started in Wuhan and has quickly spread around the world. It had killed 638 people and infected 31,453 as of Friday morning.Mainland China's banks have also been urged to take special measures to help companies and individual customers who find themselves struggling. Coronavirus forces Yum China to shut a third of its 9,200 stores in ChinaThe China Banking and Insurance Regulatory Commission issued guidance last month that mainland lenders should extend credit and cut interest rates to companies facing difficulties as a result of the health crisis, as well as give special consideration to individuals having problems repaying mortgages or credit cards.At a press conference on Friday, Zhou Liang, a vice-chairman at the banking regulator, said China's banks had increased lending and cut rates for firms affected by the coronavirus outbreak.Bank of China Hong Kong (BOCHK) was the first of the Hong Kong's lenders to announce offers to help relieve the strain, including allowing mortgage borrowers to repay interest only for up to a year. It will also implement a speedy one-day approval process for low-interest SME loans of up to HK$2 million, with a repayment period of five years.For companies that produce masks and other medical equipment to contain the virus, BOCHK will facilitate their account-opening, remittances and payments, and waive all fees. HSBC and Standard Chartered quickly followed BOCHK's lead, saying they are keeping in close contact with customers to offer help.Owners of smaller businesses welcomed the measures, but did not think all of them were particularly helpful."The coronavirus outbreak is even worse than the anti-government protests. People go out for dining on the days when there are no protests. But since the outbreak started two weeks ago, everyone is staying home, and very few are going to restaurants to have meals," said Ivan Wong, who owns Yakiniku More, a Japanese barbecue restaurant in Tsim Sha Tsui."I will look at the relief measures of the banks to see if there are any low-interest loan programmes to help ease cash flow. I do not think the offer to repay interest only is very helpful, but the low-interest loans will be helpful," he said.This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2020 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.
Some banks in Hong Kong are rolling out measures to help homeowners and businesses in the city overcome the impact of coronavirus outbreak on their finances as the government and rating companies warn of further fallout in the local economy.The Bank of China Hong Kong, one of three currency-issuing lenders in the city, was first to move on Thursday when it offered relief to clients facing affected by the viral outbreak. Standard Chartered is evaluating programmes to help struggling customers, while HSBC said it had already put in place plans to help small businesses.Other lenders are likely to follow suit. The Hong Kong Monetary Authority said some banks would introduce a temporary freeze on principal repayment of residential and commercial mortgages, reduction in credit card fees and restructuring of repayment schedules for corporate loans."The HKMA welcomes such initiatives, and would encourage other [authorised institutions] to consider taking similar action," Raymond Chan, the HKMA's executive director for banking supervision, said in a letter to industry leaders. "A proactive response by the banking industry will help mitigate the financial consequences of the outbreak."Finance chief Paul Chan Mo-po warned on Sunday the city's economy could shrink again in 2020 as the outbreak forced tourists to stay at home and prompted some businesses to temporarily shut their businesses. The government has said retail sales slumped last quarter by the most on record as mainland tourist arrivals shrank.Schools are closed until March 2 and employers have been encouraged to allow their staff to work from home to stem the spread. The deadly virus has claimed more than 560 lives and infected more than 28,000 people, mostly in mainland China, where the virus originated. Hong Kong has recorded at least 22 confirmed cases and one death. Sa Sa International cuts directors' pay as Hong Kong, Macau sales crashBanks should take a "sympathetic stance" in dealing with customers facing financial stress because of the virus, the HKMA said in the letter. They should, to the extent prudent risk management principles permit, consider requests from these borrowers for temporary relief arrangements favourably, it added.Banks "should also clearly communicate their policies to relevant staff so as to enable consistent treatment of customers and make sure that the relevant staff are reachable by customers who wish to discuss their financial situation," it added.Regulators in mainland China issued guidances to lenders last month to give special consideration to individuals having difficulty repaying their mortgages or credit cards.Hong Kong's banks, as well as mainland lenders, made similar moves during the Asian financial crisis in 1998 and Sars (severe acute respiratory syndrome) epidemic in 2003, which both weighed heavily on the city's economy. From Nike to Apple, firms warn coronavirus is pinching profitsThe total outstanding amount of mortgage loans in Hong Kong stood at HK$1.437 trillion (US$185 billion) at the end of last year, according to the HKMA.Under Bank of China Hong Kong's relief measures, a typical borrower with a mortgage loan of HK$4 million at an annual interest cost of 2.25 per cent would save HK$32,000 in payments over a six-month period, according to Raymond Chong, managing director at mortgage broker StarPro Agency.Ivy Wong Mei-fung, a managing director at Centaline Mortgage Broker, said the measures would have a neutral impact on the property market as it would not affect new borrowers or lead to more buying interest.BOC Life also said it would allow policyholders facing difficulty to delay paying their annual premiums until June of this year.Standard Chartered said Thursday it was "looking at various programmes to help relieve some of those pressures from our clients and to help them get through this difficult time. More details will be announced in due course."HSBC has maintained a "constant dialogue" with individual and business customers to understand how the economic headwinds may be affecting their financial situations, a spokeswoman said. The bank unveiled several measures to help support small- and medium-sized businesses in August and its life insurance business would extend special coronavirus coverage to its customers, she said."We value our long-term relationships with clients and have always worked closely with our customers to support their financial needs in different circumstances," she said. For those affected by the outbreak, "we will work with them to review their current situation and identify appropriate arrangements," she added.This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2020 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.
Moody's Investors Service has affirmed Bank of China (Hong Kong) Limited's (BOC Hong Kong) deposit ratings at Aa3/P-1. At the same time, Moody's has affirmed the bank's Baseline Credit Assessment (BCA) and Adjusted BCA at a2, Commercial Paper rating at P-1, Short-term Counterparty Risk Ratings (CRRs) at P-1, Counterparty Risk Assessment (CR Assessment) at Aa2(cr)/P-1(cr), Senior Unsecured MTN program at (P)Aa3, Subordinated debt and MTN program at A3/(P)A3, and non-cumulative Preference Stock at Baa2 (hyb).
Most of Hong Kong's banking and finance companies say they will give their staff lai see as a token of appreciation for their dedication and hard work even after business took a hit last year because of the economic slowdown and social unrest.HSBC and Bank of China Hong Kong, the two of three note-issuing banks in the city, along with dozens of other financial firms will be handing out red paper packets or digitally transferring "lucky money" to their employees, which can range anywhere between HK$50 (US$6.4) and HK$500.It is a tradition in Hong Kong for companies to give their staff lai see on their first day back at work after the extended Lunar New Year holiday. The upcoming Year of the Rat begins on January 25, but most employees will return on January 29 when they will be handed the festive red packets.HSBC will be paying its nearly 20,000 staff HK$500 each, the highest among 10 banks and insurance companies, the South China Morning Post has found. The tradition will cost the city's biggest bank some HK$10 million.Bank of China Hong Kong plans to give its staff lai see of HK$200 each. Photo: Reuters alt=Bank of China Hong Kong plans to give its staff lai see of HK$200 each. Photo: Reuters"We believe lai see is an appropriate channel to express our gratitude to staff for their hard work throughout the year," Diana Cesar, head of HSBC's Hong Kong office, said in an email to the bank's employees.HSBC, however, has done away with the traditional red packets and instead an electronic red packet of HK$500 will be deposited to the payroll account of each of the bank's employees. Hong Kong companies are spending big on this 'lai see' envelope tradition that dates back to the 1960sIts subsidiary Hang Seng Bank, which employs about 11,000 people, will also give lai see. While the bank did not disclose the amount, it said it would be the same as last year.BOCHK plans to give its staff HK$200 each, which will be transferred electronically to their accounts, a spokesman said. The bank has not changed the amount for two years now.Bank of East Asia said it would give HK$50 lai see to staff this year.FWD Group, the insurance arm of Richard Li Tzar-kai, the younger son of Hong Kong's richest man Li Ka-shing, is sticking to the traditional red packets to give to its 4,800 staff and agents.Richard Li Tzar-kai's FWD Group will give its 4,800 staff and agents traditional lai see packets. Photo: Felix Wong alt=Richard Li Tzar-kai's FWD Group will give its 4,800 staff and agents traditional lai see packets. Photo: Felix WongThe company said that to celebrate the Year of the Rat, all employees and agents will receive their "official company lai see" to kick start the new year. They will also get a "bonus lai see" from Hong Kong chief executive Ken Lau, who will randomly draw from a bunch of lai sees containing different amounts.Even overseas firms such as US investment Franklin Templeton are taking part in the Hong Kong tradition."Recent social unrest and economic downturn in Hong Kong has not impacted the way Franklin Templeton celebrates Chinese New Year with our local staff. The company will provide the same amount of return to work lai see as last year and there will be an annual celebratory gathering for all employees," a spokesman said, without disclosing the lucky money sum.This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2020 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.
Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. But if...
Could BOC Hong Kong (Holdings) Limited (HKG:2388) be an attractive dividend share to own for the long haul? Investors...
Financial companies, among the most important drivers of Hong Kong's economy, are ramping up security, temporarily closing branches and allowing staff to work from home as the city endures one of the worst political crises in its history.They are also alerting workers to changing traffic conditions and potential conflict points by email as anti-government protests that disrupt transit and daily life in the city enter a fifth month. Radical demonstrators have been targeting businesses with mainland-China ties " and in some cases mainlanders themselves.But there is only so much you can do once employees leave the building, financial providers said.The long holiday weekend that culminated on Monday, October 7, was marked by some of the most violent clashes so far after Hong Kong's government invoked a colonial-era emergency law to ban the wearing of face masks at public assemblies. Hard-core protesters vandalised MTR stations and mainland-associated businesses, including several Chinese bank branches. Hong Kong may have lost US$4 billion to Singapore during protests: reportAs work resumed last week, a dozen bank branches were closed and more than 300 automated teller machines, roughly 10 per cent of the cash points scattered throughout the city, had been damaged and were not operational."Our priorities are the safety of our employees and support of our customers' financial needs," an HSBC spokeswoman said. "Our colleagues always have the option of flexible work arrangements."All of HSBC's branches were open last week, but the bank closed branches ahead of planned demonstrations on October 5 and has lowered a security grate that restricts pedestrian access at its main building in Central at various points throughout the unrest.The protests began in June over a controversial extradition bill that would have made it easier to send criminal suspects to mainland China for trial, but have morphed into a larger discussion about income inequality, affordable housing and the growing influence of Beijing over Hong Kong. The bill was formally withdrawn in September, but that has done little to stem increasingly violent clashes between more radical protesters and police. After 79 days, protests hit Hong Kong economy worse than OccupyOn the weekend of October 5 and 6, most of the city's shopping malls closed and many Chinese banks shut branches and restricted access to their ATMs as the machines have increasingly become a target of vandalism. Several grocery store chains and 7-Elevens also closed on that Saturday.The MTR, which has been a frequent target for vandalism during the demonstrations, closed nearly all of its network over that weekend and shut early every night of the next week to facilitate repairs.With the disruptions stretching into workdays in recent weeks after primarily being restricted to weekends, HSBC, Standard Chartered and other banks said they were allowing employees to work remotely as needed."Safety of all our staff is our priority. We have a robust business continuity plan in place. In view of the current situation, we would provide flexibility to our staff's work arrangement and allow them to work from home if feasible," a Standard Chartered spokeswoman said. "At the moment, all our bank branches are open and provide services to our clients as usual."On Friday, October 4, a JP Morgan employee was punched outside the company's offices at Chater House in Central after responding to protesters with "We are all Chinese" in Mandarin. The employee did not appear to be targeted because he worked for a global bank. Bloomberg reported that the incident prompted JP Morgan to increase security at its Hong Kong offices and warned employees to avoid its Central offices over the weekend.JP Morgan declined to comment when contacted by the Post."The safety of all our employees is our top priority and we have a number of ways we are ensuring this and we continue to monitor and respond with staff updates as needed," a Citigroup spokesman said.There were 237,018 people working in the finance and insurance sector, about 7.8 per cent of the overall workforce in Hong Kong, as of the end of the second quarter, according to the most recent sector data available from the city's Census and Statistics Department. It was unclear, however, how many were employed by mainland-owned companies as many Chinese firms do not provide a breakdown of their Hong Kong workforce. Rising corporate debt could spell trouble for Asia's banks, Moody's says"We have reminded our staff to stay alert, and keep away from dangerous areas," Max Yu, senior deputy chief strategy officer of China Resources Group, said on the sidelines of a Greater Bay Area forum in Hong Kong on Thursday.China Resources, a state-owned conglomerate based in Hong Kong with businesses ranging from finance to consumer products and property, has more than 6,000 employees in the city, with 90 per cent of them being Hongkongers.Given businesses and individuals with mainland ties have been targeted, Yu said he encouraged employees to try to avoid clashes with protesters."No need to challenge irrational people. It does not help resolving the conflict, but will make it worse," he said.Following the September 11 terrorist attacks in New York, many global banks have implemented additional security measures to keep track of and advise employees when there are dangerous situations in or around their offices, such as a building fire or terrorist incident. These can include requests for employees to check in with a company's global security centre.There is no indication that financial providers have implemented the more extreme measures in Hong Kong, such as mandatory check-ins, during the four months the protests have been happening. The worst clashes have occurred when most employees are not in the office.Financial providers, however, have been staying in contact with their employees with internal emails alerting them to changing conditions, such as transport network closures or potential sites of demonstrations."We've been providing our employees with detailed travel and security updates," a Goldman Sachs spokesman said.Banks have declined to elaborate on their overall security plans, but Bank of China Hong Kong, one of three banks authorised to print money in the city, said on Tuesday it had "activated its contingency plan" after several of its branches and ATMs were damaged by protesters. The Hong Kong arm was established in the city more than 100 years ago."Our customers' assets, information and all safe-deposit boxes remain safe upon evaluation," BOCHK said in a statement. "We would like to reiterate that the operation of the bank remains normal, with a strong financial position and ample liquidity."Societe Generale said it has "business continuity measures in place" to ensure the bank is able to operate and provide service to its clients."With this in mind, staff are informed of potential traffic disruptions, work from home when relevant, and reminded to take personal safety as a priority during their commute to the workplace," the spokesman said.Additional reporting by Xie Yu and Holly Chik.This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2019 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.
Hong Kong anti-government protesters are increasingly focusing their anger on mainland Chinese businesses and those with pro-Beijing links, daubing graffiti on store fronts and vandalising outlets in the heart of the financial centre. Protesters took aim at some of China's largest banks at the weekend, spray-painting anti-China slogans on shuttered branches and trashing ATM machines of outlets such as Bank of China's Hong unit, while nearby international counterparts such as Standard Chartered escaped untouched.
The launch of new online-only banks in Hong Kong is expected to be delayed in part due to anti-government protests in the city, people with direct knowledge of the matter said. Most of the eight newly licensed digital banks in Hong Kong, including joint ventures involving Standard Chartered and Bank of China Hong Kong, had aimed to begin operating before the end of 2019. Some of these so-called virtual banks had aimed to launch brand promotion campaigns as early as this month, but these plans have now been put off, the people said, on condition of anonymity give the sensitivity of the matter.
The time-honoured traditions of Cantonese opera form the backdrop of a brand new set of HK$100 notes to be launched in Hong Kong on Tuesday.The city's note-issuing banks, HSBC, Standard Chartered and Bank of China (Hong Kong), have come up with their own designs to capture the spirit of the hugely popular ancient art form on the new-look banknotes.The notes, available at bank branches from Tuesday, bear characters and scenes evoking the celebrated musical stage shows, including a princess in a Chinese wedding gown and young lovers in a garden.Bank of China (Hong Kong)'s design features a single beautiful young lady in traditional opera costume. Photo: K. Y. Cheng alt=Bank of China (Hong Kong)'s design features a single beautiful young lady in traditional opera costume. Photo: K. Y. Cheng"Among the current series of banknote designs, I particularly like the HK$100 banknote because it features the Cantonese opera, which is a very traditional Hong Kong culture and popular performing art," said Norman Chan Tak-lam, chief executive of the Hong Kong Monetary Authority.In Hong Kong, it is the de facto central bank that decides security features of paper currency, but the three note-issuing banks came up with the designs.Chan hosted a launch ceremony for the new HK$100 banknotes, attended by the chief executives of the three lenders, at the Xiqu Centre in West Kowloon Centre. It featured a 20-minute live performance of Cantonese opera by local young artists.Romance featured heavily in the designs of the new banknotes.HSBC's note shows a couple of young lovers meeting in a Chinese garden, while Standard Chartered opted for a princess in a Chinese wedding gown with her new husband. BOCHK kept it simple, with a single beautiful young lady in traditional opera costume."Love stories are an important theme of many Cantonese operas, which is why we chose the young lovers as our theme," said Diana Cesar, chief executive of the Hong Kong office of HSBC, at the ceremony. Dispelling 5 common misconceptions about Cantonese opera"Cantonese opera continues to thrive in Hong Kong, attracting young people to learn and appreciate the art. This theme, beautifully captured in watercolour before being converted into engravings, expresses HSBC's connection with the Hong Kong community and our shared heritage."Standard Chartered's princess and husband are based on two young Hong Kong artists, according to Mary Huen Wai-yi, the bank's local chief executive."We want to show the spirit of the young artists. The show must go on, and we need young artists to continue the show," said Huen.BOCHK chose to focus on a single young lady as it wanted to show her beauty, said Yu Xin, senior art director of China Banknote Printing & Minting Corporation, who designed many of the bank's themed notes.The designer said the current banknotes have more security features than the ones in 2010.To celebrate its new HK$100 note, HSBC is launching an augmented reality filter in which the user's "selfie" photo taken on a smartphone is turned into a Cantonese Opera character.Cantonese opera was listed as an intangible cultural heritage of humanity by Unesco in 2009."This year marks the 10th anniversary of the Unesco inscription of Cantonese opera, making the launch of this banknote all the more meaningful," said Gao Yingxin, vice-chairman and chief executive of BOCHK.Forthcoming themes in the banknote series include butterflies which will adorn the HK$50 note and yam-cha " the tea and dim sum culture " that will appear on the HK$20. Both are due to be launched in early 2020.This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2019 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.
In December 2018, BOC Hong Kong (Holdings) Limited (HKG:2388) announced its earnings update. Overall, it seems that...
BOC Hong Kong (Holdings) Limited (HKG:2388) received a lot of attention from a substantial price movement on the SEHK...
Seven of Hong Kong's biggest banks " including two note-issuing lenders " closed branches on Monday as strikes and protests brought large parts of the city to a standstill.HSBC Holdings said it had closed 10 of its branches at 2.30pm. Hang Seng Bank, a subsidiary of HSBC, said it had shut five branches for the whole day, while 15 more closed early, in the afternoon.Standard Chartered, one of the three banks that issue currency in Hong Kong, closed several branches in the afternoon, China Citic Bank International closed five out of its 30 branches, and Citibank closed two branches an hour earlier than usual.Singaporean lender DBS closed all of its branches in Hong Kong, saying it was for the safety of its staff.Most of the banks' closures were in areas including Tsuen Wan, Mong Kok, Tai Po and Admiralty.Meanwhile, ICBC Asia, the Hong Kong arm of Industrial and Commercial Bank of China, the country's largest lender, said on Monday evening it was shutting all its branches until further notice."We respect the decision of some staff if they decide to join the strike while we need to make sure the branch operation can continue," said Louisa Cheang, vice-chairman and chief executive of Hang Seng Bank."We have decided to close five small branches on Hong Kong Island for the whole day today to transfer manpower to support other branches. We also decided to close more branches in the afternoon for the safety concern of our staff. We will continue to monitor the situation."All three note-issuing banks in Hong Kong saw their shares fall to the lowest level in three months as a citywide strike disrupted travel and violent protests continued. At the same time, China's currency fell below a psychologically important level for the first time in a decade after its trade war with the US escalated again.Bank of China (Hong Kong) dropped 4.5 per cent on Monday morning to HK$27.8 before bouncing back to close at HK$28.1. Standard Chartered Bank went down 4 per cent to HK$62.3, and HSBC Holdings fell 1.8 per cent to HK$61. The wider Hang Seng Index dropped 2.9 per cent as strike action brought much of the city's transport network to a standstill.HSBC faced a double blow as its chief executive John Flint stepped down after just 18 months in office.Its subsidiary Hang Seng Bank plunged 4 per cent in the morning, also to a three-month low, to finish the morning at HK$174. It recovered slightly to close the day 3.6 per cent lower at HK$174.9. In a results announcement on Monday morning it said its expected credit losses and impairment charges had doubled to HK$510 million in the first half of this year."Banks and all sectors went down because of the slide of yuan and the strike. If [the strikes] become routine, like the protests over the past two months, it will be destructive," said Louis Tse Ming-kwong, managing director of VC Asset Management."Chief Executive Carrie Lam Cheng Yuet-ngor's speech on Monday morning provided no solution to Hong Kong's current crisis. These are all bad omen and led to the sharp fall of the market today."HSBC Group and BOCHK are the major mortgage providers in Hong Kong. The protests and strikes are going to hurt the property market in the medium term and hence may lead to more bad debts for banks." HSBC's CEO makes surprise departure as bank seeks different approachThe yuan on Monday morning fell below 7 against the US dollar for the first time in about 10 years, and just days after the US president threatened to impose a new 10 per cent tariff on US$300 billion worth of Chinese products from September 1.Shares of the big four state-owned Chinese banks all dropped to their lowest level in recent years on Monday morning. Bank of China fell 2.6 per cent to HK$3.05 while Agricultural Bank of China lost 2.6 per cent to HK$3.02 " both down to their lowest since mid-2016.Industrial and Commercial Bank of China slid 2 per cent, while China Construction Bank lost 2.53 per cent, both trading at their lowest in two years. Bank of China Communications, another major mainland Chinese lender, lost 1.4 per cent to trade at a one-year low.Ivan Li, head of CSL Securities Research, said the yuan's weakness was a more important factor than the protests in Hong Kong as the former would have a bigger impact on banks and companies."It should be noted that the recent move by the US Fed to cut the interest rate would probably be bad for the banks' net interest margins," Li said.This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2019 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.
Hong Kong's first virtual banks are not expected to be operational for at least another month, but banking customers in the city are already reaping the benefits. For the first time in about two decades, eight of the special administrative region's largest banks will no longer charge fees for failure to maintain a minimum monthly balance.HSBC, one of the city's three currency-issuing banks, kick started the movement and announced in June it would scrap the fees starting August 1. The award of eight virtual banking licences since March may have had something to do with the change of heart."HSBC needs to act now to persuade its millions of customers to stay on, or many of them may opt for joining the virtual banks, which do not charge a fee for small depositors," Ben Kwong Man-bun, director at brokerage KGI Asia, said at the time.Three million customers will be affected at HSBC, and its announcement was quickly matched by Standard Chartered Bank, Bank of China (Hong Kong), Hang Seng Bank, Bank of East Asia, Dah Sing Bank, ICAC Asia and Citibank.The minimum balance fees, introduced in 2001, allowed banks to recoup costs following a change in rules that let them freely compete for deposits and lending by offering different interest rates. The fee has long been criticised as a penalty on small but loyal depositors.Hong Kong virtual banks. SCMP Graphics alt=Hong Kong virtual banks. SCMP Graphics"I have paid the minimum balance fee from Day 1, when HSBC started charging me in 2001," David Wong, a white-collar professional, said. "As a small depositor, I had no choice but to pay the fee, as I needed the banking services. I am happy to see the arrival of virtual banks has forced the big players to scrap it."Millions of small depositors like Wong have had to pay for basic banking services over the past about two decades, with fees ranging from HK$50 (US$6.4) to HK$100 a month if their bank balance falls below HK$5,000-10,000.Virtual banks, on the other hand, have been banned by the Hong Kong Monetary Authority from charging any such fees, a move that is expected to keep traditional players on their toes as they work to improve their services. Hong Kong hands out virtual bank licences as city catches up with China, JapanThe scraping of minimum balance fees is also a "credit negative" for traditional banks, as it reduces their revenue and profit, according to Sonny Hsu, vice-president and senior credit officer at Moody's Investors Service. According to a Moody's estimate, the removal will reduce HSBC's annual net profit by less than 1 per cent.Anil Agarwal, equity analyst at Morgan Stanley, said in a research report: "The recent move by HSBC to waive off minimum balances indicates upcoming pressure. Cost pressure should start soon, as these entities are hiring staff for new businesses, which should cause wage and cost inflation."Hong Kong banks have large revenue and profit pools, at about US$45 billion and about US$25 billion, respectively. The competition will rise for liabilities and, hence, revenues."This makes Hong Kong one of the largest profit pools for banks globally. But, as a result [of the virtual banking licences], that pool is in the sights of global technology players as a market open to disruption and taking away a share of revenues," he said.But the strategy of scraping minimum balance fees seems to be working " Wong said he would stay with HSBC. "Without the minimum balance fee, it seems there is not much difference between traditional banks' digital banking services and virtual banks," he said.The virtual banks are expected to start operations six to nine months after receiving their licences, which translates as between September and January, although they could ask for more time to build up systems and management.There are no restrictions on loan and deposit amounts, or the interest rates offered, by these lenders. But the monetary authority does restrict them from using predatory pricing tactics and other aggressive methods to grow their market share.The cost of running a bank branch in Hong Kong " the most expensive property market in the world " can amount to HK$1 million a month in wages and rent. Hong Kong issues four more virtual bank licences to spur innovationThis makes loans below HK$200,000 unprofitable, according to a veteran banker. This is why small depositors and small and medium-sized companies do not seem to enjoy good banking services, as banks tend to focus on big-ticket clients.Virtual banks, on the other hand, cannot have bricks-and-mortar branches, and must use apps, the internet and ATMs to service customers. Their reliance on technology is, therefore, key to cutting costs and keeping smaller loans profitable.Norman Chan Tak-lam, retiring chief executive of the HKMA, the city's de facto central bank, has said virtual banks are a key component of Hong Kong's smart banking push, and that they will facilitate financial innovation as well as enhanced customer experience and inclusion.Image of the Central Business District of Hong Kong showing the International Finance Centre (IFC) (centre back); Standard Chartered Bank Building (second from right); and HSBC Headquarters Building (fsr right) in Central. Photo: Roy Issa alt=Image of the Central Business District of Hong Kong showing the International Finance Centre (IFC) (centre back); Standard Chartered Bank Building (second from right); and HSBC Headquarters Building (fsr right) in Central. Photo: Roy IssaYat Siu, the Hong Kong-based co-founder and chairman of Australia-listed gaming developer Animoca Brands, said he would use virtual banking services."As an entrepreneurial group of companies, we regularly set up new businesses, and each of these requires a new bank account. Recently, we have seen significant delays in the account opening process, which impacts our business efficiency," Siu said.Virtual banks, with their emphasis on individuals and SMEs, should offer some respite.Michael Wang Lan, the chief executive of Bank of China (Hong Kong)-led virtual banking joint venture Livi, said the lender will offer quick approvals as well as new solutions that will make it easier for small business owners to manage finances and grow their business. He said loan approvals would take minutes as the bank will not require paperwork.Simon Loong, the co-founder and chief executive of home-grown Hong Kong fintech unicorn WeLab, said: "[We] will initially focus on individual customers, which is aligned with the HKMA's objective of financial inclusion for the retail segment."Set up in Hong Kong as a moneylender six years ago, WeLab now has 38 million customers in the city, mainland China as well as Indonesia.Tencent-backed Fusion Bank will start by providing banking services such as remote account opening, deposits, loans, remittance and other core services. It will target the general public and SME clients.Exterior of Hang Seng Bank headquarters building in Central. Photo: David Wong alt=Exterior of Hang Seng Bank headquarters building in Central. Photo: David WongThe virtual banks, much like traditional lenders, will have to meet anti-money laundering and other compliance regulations. WeLab's Loong said the banks could comply with the law by adopting new technology to control risks.They will also have to offer higher interest rates on deposits and lower costs of lending to compete, said James Lloyd, partner and Asia-Pacific financial technology Leader at EY."[The] overseas experience has shown that customers, whether individuals or small businesses, will be the real winners with the emergence of digital-only banks. The use of best-in-class technology will improve processes across the bank " helping to speed up loan approvals, for example, as well as account opening processes," he said.Moody's Hsu said the average net interest margin of all banks in Hong Kong stood at 1.6 per cent as of the end of last year. He said he believed the competition offered by virtual banks, together with a cut in interest rates from August 1, will narrow interest margins further. Fintech unicorn WeLab bags Hong Kong's fourth virtual bank licenceBut it will be hard for any virtual bank to become the next HSBC any time soon. According to a report by credit-rating agency Fitch Ratings: "The granting of virtual bank licences would introduce more competition, but it is unlikely to be a significant game-changer for the local incumbents that have been operating in this competitive landscape for many years."Hong Kong's virtual banks, on average, will have about HK$1.9 billion in initial capital each. HSBC, on the other hand, has assets worth US$2.55 trillion.EY's Lloyd said: "Most Hong Kong people have bank accounts already, and often have multiple credit cards. They may like to open an account at one or more of the virtual banks to enjoy higher interest rates, or other incentives offered by these newcomers."They might not use the virtual banks as their primary or payroll account provider from Day 1, but this could certainly change over time as customer loyalty increases."Michael Wang Lan, the chief executive of Livi, a virtual bank backed by Bank of China (Hong Kong), says loan approvals will take minutes as the lender will not require paperwork. Photo: K Y Cheng alt=Michael Wang Lan, the chief executive of Livi, a virtual bank backed by Bank of China (Hong Kong), says loan approvals will take minutes as the lender will not require paperwork. Photo: K Y ChengAmong the challenges virtual banks will face, perhaps the toughest will be the regulation of use and protection of personal data.Paul Chen, US partner at law firm Mayer Brown based in San Francisco and Silicon Valley, said lenders that use artificial intelligence and "robo advisers" to market and sell financial products will need to ensure such advice is suitable for individual customers, and that customers' data is used in an appropriate manner.Virtual banks will also find that traditional lenders are working towards similar goals."HSBC is already a digital bank. Currently, over 80 per cent of our Hong Kong retail banking transactions occur over digital channels such as mobile, online banking, as well as PayMe," said Diana Cesar, chief executive of the bank's Hong Kong office.Citibank did not apply for a virtual banking licence, as it offers "all types of online banking services that a virtual bank can offer", said Angel Ng Yin-yee, its Hong Kong and Macau chief executive. "Plus, Citi can offer services at our branches that virtual banks cannot." Hong Kong virtual bank key as Standard Chartered targets improved returnsRecruitment could be another challenge, as traditional lenders are home to veteran bankers."Big traditional banks are hiring digital staff to upgrade their digital banking services to prepare for the coming of virtual banks. The virtual banks can capture the payment, or other smaller scales of financing from traditional banks.However, customers are likely to stick to traditional banks for wealth management services, or big corporate deals," said Robert Knight, managing partner of international headhunter DHR."The simple reason is trust. If big traditional banks offer the same services as the virtual banks, customers are likely to stick to the digital banks of the big traditional lenders," Knight added.This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2019 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.
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Hong Kong has issued online-only banking licences to three groups, including joint ventures (JVs) of Standard Chartered and BOC Hong Kong, in what could be the biggest shake-up in years in the city's retail banking sector dominated by old-guard lenders. The licence will give holders access to a lucrative retail banking market in the Asian financial hub, where many consumers are unhappy with the current options.
Hong Kong has issued online-only banking licences to three groups, including joint ventures (JVs) of Standard Chartered and BOC Hong Kong, in what could be the biggest shake-up in years in the city's retail banking sector dominated by old-guard lenders.