ZA Bank Marks Milestone: The First Virtual Bank to Report Monthly Profit in Hong Kong

ZA Bank, Hong Kong's initial virtual bank, has announced a monthly profit for the first time

Hong Kong's biggest purely digital bank witnessed a profitable month in July, a first in its almost four-year history.

ZA Bank, the biggest digital bank in Hong Kong, has emerged as the first of eight exclusively online banks to record a monthly net profit since its inception in 2020. This achievement was made possible through an increase in deposits and fee revenue from its recently introduced mutual fund and US stock trading operations.

"ZA Bank has reached a net operating profit after being operational for four years, marking a significant achievement in the evolution of digital banking in Hong Kong," stated Calvin Ng Chung-ho, the acting CEO of ZA Bank, during an interview.

Ng revealed that the profit earned in July was primarily fueled by an augmentation in interest income. A surge in deposits, which climbed 70 per cent from the previous year to HK$16.8 billion (US$2.15 billion) by the end of June, also contributed to this. Furthermore, Ng mentioned a growth in loans in the single digits, but did not provide specific details.

The difference between the expense of financing and lending rates, also known as the net interest margin, increased to 2.21% in the first six months, a rise from 1.87% from the same period the previous year.

Ng reported that the bank saw an increase in fee income during the first half, due to the sale of their mutual fund and insurance products to individual investors. This boost in income was also attributed to the initiation of US stock trading services. With 800,000 clients, ZA Bank holds the highest customer count among the eight virtual banks.