In this July 25, 2019 photo, a skyline with financial buildings, including the headquarters of HSBC, is seen in Hong Kong. PAUL YEUNG BLOOMBERG Hong Kong s leading virtual bank, ZA Bank, is launching a range of investment funds from global asset management companies, a potentially profitable venture for the lender.
Wealth management products are the next frontier for the eight licensed virtual banks in the special administrative region, which offer them a comparative advantage because of their digital customer interface. Income from fees is seen as a source of growth for these banks.
The Hong Kong-dollar fund by Franklin Templeton Investments Asia invests in equity securities of technology companies. The fund has three holdings, Microsoft 6.9 percent, Apple 5.3 percent and Amazon.com Inc 4.7 percent. It has a maximum sales charge of 5 percent and an annual charge of 1.50 percent, and is based in Luxembourg. The annualized performance at the end of June this year was - 36.45 percent.
The ZA Bank will be able to waive subscription fees for the funds on offer until the end of September.
ZA Bank Chief Executive Officer Rockson Hsu said the bank's services have now entered the investment space after launching insurance services last year. As a gamechanger in the banking sector, he said that ZA Bank aims to make investment fund experiences easier and more autonomous for people to invest. Data from December 31st last year shows that ZA Bank is Hong Kong's leading virtual bank serving more than 500,000 customers.
By the year 2025, about 24.9 percent of Hong Kong residents have a virtual bank account, according to a consultancy.