Advertisement
Ping An Insurance
BusinessBanking & Finance

Ping An OneConnect sets the pace as Hong Kong’s virtual banks deliver better services to SMEs, keep sector giants on their toes

  • Ping An OneConnect, which is owned by insurance giant Ping An, is the first virtual bank to focus completely on SMEs
  • Hope to become profitable in about three years’ time, chairman says

Reading Time:3 minutes
Why you can trust SCMP
Dicky Yip, Ping An OneConnect’s chairman, said virtual banks need to have a focus. Photo: Jonathan Wong
Enoch Yiu
The introduction of virtual banks in Hong Kong over the past year has improved the services small and medium-sized enterprises (SMEs) have access to, industry observers and insiders said.
“While only a few virtual banks have put their focus on small companies, their existence has already added to competition in the market, which has forced the traditional lenders to [either] provide more digital services, or to cut fees charged from corporate clients,” said Peter Shiu Ka-fai, the lawmaker representing the wholesale and retail sector. The virtual banks have helped improve the banking services available for many SMEs, he added.
Eight such lenders were launched last year as part of a push by the Hong Kong Monetary Authority to get the sector to serve a wider section of society. While six of these banks are focused mainly on retail banking services currently, two have said they would like to service SMEs. One is Ant Bank (Hong Kong), the virtual banking arm of Ant Group, and the other is Ping An OneConnect Bank.
Advertisement
Ping An OneConnect, which is owned by Ping An Insurance, China’s largest insurer, is the first virtual bank to focus completely on SMEs. The lender, which marks one year of operations on Wednesday, allows new account opening within a day through its mobile apps and approves new loans within five days, as opposed to traditional banks, where these process can take weeks and even months.

04:13

Small businesses in China's Xian still struggling a year after controlling Covid-19 pandemic

Small businesses in China's Xian still struggling a year after controlling Covid-19 pandemic

“With the adoption of technology and data from our partnership, we have achieved a good loan book without any bad debt – that is a good first year. We hope to become profitable in about three years’ time,” Dicky Yip, Ping An OneConnect’s chairman, told the South China Morning Post. The bank has partnered with Tradelink Electronic Commerce, a government-backed e-commerce services provider, to get client referrals and uses Tradelink’s data for credit assessments.

Advertisement

The bank has attracted 1,000 SMEs, which have borrowed a total of HK$1 billion (US$128.5 million) over the past year. There were no overdue cases or bad debt currently, according to bank data. It has a 41 per cent market share of the 90 per cent guarantee loan programme supported by the Hong Kong Mortgage Corporation.

Advertisement
Select Voice
Choose your listening speed
Get through articles 2x faster
1.25x
250 WPM
Slow
Average
Fast
1.25x