Standard Chartered becomes third big lender in Hong Kong to scrap minimum-balance fee as virtual banks get ready to challenge their dominance
- All three note-issuing banks – HSBC, Standard Chartered and BOCHK – have now said they will abolish the fee, widely seen as a penalty on small depositors
- Analysts say the move is to minimise the threat from virtual banks due to launch later in the year
Standard Chartered Bank will abolish its minimum-balance fee from August 1, the third major bank in a week to scrap the charge imposed on small depositors as Hong Kong’s traditional lenders prepare to fight off competition from virtual banks.
HSBC and Bank of China Hong Kong both announced last week that they would drop the fee, also effective from August 1.
Now all three note-issuing banks, the biggest and oldest lenders in the city, will no longer levy charges on their small depositors. HSBC believes 3 million of its customers will benefit from the move.
Hang Seng Bank, a subsidiary of HSBC, is also considering cancelling the minimum-balance fee, a spokeswoman said on Tuesday.
Analysts expect more banks to follow suit before a wave of virtual banks, which operate purely online without branches, launch their services in the fourth quarter. Since March, the Hong Kong Monetary Authority has granted eight virtual bank licences to add competition to a landscape dominated by traditional lenders. The digital lenders are not allowed to charge a minimum-balance fee.
Standard Chartered, established in Hong Kong in 1859, will remove the fee for its premium bank clients, who currently have to pay HK$360 per quarter if their transaction volume is less than HK$200,000 (US$25,623). “Easy banking” customers will no longer need to pay HK$180 a quarter if trading below HK$10,000.