BOC Hong Kong, Standard Chartered Ventures Get Hong Kong Virtual Bank Licenses

By Kenan Machado

HONG KONG--BOC Hong Kong (Holdings) Ltd. and PCCW Ltd. Wednesday got initial approval from Hong Kong authorities to launch separate online-only banking ventures in the city.

BOC Hong Kong, controlled by Bank of China Ltd., one of the biggest banks in the mainland, said its venture with JD.com Inc. (JD) and Jardine Matheson Holdings Ltd. (J36.SG) had been granted a banking licence for a "virtual bank" by the Hong Kong Monetary Authority. The firms will initially invest 2.50 billion Hong Kong dollars ($318.5 million) in the venture in proportion to their stakes, BOC Hong Kong said in a filing with the local exchange.

Separately, Hong Kong telecommunications services provider PCCW (0008.HK) and HKT Trust (6823.HK) said its venture with Standard Chartered PLC (2888.HK) and Ctrip.com International Ltd. (K3RD.SG) got approval to operate a virtual bank in Hong Kong.

HKT will buy an initial 15% stake in the venture, called SC Digital, for HK$241.6 million, while PCCW will buy a 10% stake for HK$161.1 million. HKT and PCCW agreed to further invest HK$239.3 million and HK$159.5 million, respectively. Standard Chartered and Ctrip will own 65.1% and 9.9% of the virtual-banking venture, respectively, PCCW said.

Virtual services have had limited success in Hong Kong, a city of 7.5 million people where legacy banks dominate. HSBC Holdings PLC's social-payment app PayMe crossed the 1 million-user mark in July 2018, 17 months after its launch in early 2017.

Write to Kenan Machado at [e-mail]

(END) Dow Jones Newswires

March 27, 2019 07:06 ET (11:06 GMT)

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