Xiaomi’s Airstar Bank Debuts as Hong Kong’s Second Virtual Bank
What’s New: Hong Kong-based Airstar Bank, an internet-only lender backed by smartphone maker Xiaomi Corp., officially opened for business Thursday, the second virtual bank to start operation in the Asian financial hub.
Airstar Bank will start with deposit and loan services. To lure new depositors, the bank said it will offer annual interest rates as high as 3.6% for a year, compared with around 0.001% at most conventional banks.
Airstar Bank is owned 90% by Xiaomi and 10% by Hong Kong-based investment banking firm AMTD Group. The bank won a license in May 2019 and started a pilot run in March.
Background: Airstar Bank is among the eight companies granted virtual banking licenses by Hong Kong’s monetary authority last year as the city seeks to enhance its position as an international financial hub.
In March, ZA Bank Ltd., a unit of Chinese online insurer ZhongAn Online P&C Insurance Co. Ltd., became the first player in Hong Kong’s virtual banking market. ZA Bank counts internet giants Alibaba Group Holding Ltd. and Tencent Holdings Ltd. as shareholders.
The rollout of virtual banking in Hong Kong has lagged behind the official plan because of an extended assessment period and disruptions caused by the Covid-19 pandemic. The Hong Kong Monetary Authority (HKMA) said in 2019 that it expected all the licensed banks to start operation by the first half of 2020.
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