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Nikkei Markets

Tencent and Ant Financial win Hong Kong virtual bank licenses

Xiaomi- and Ping An-backed ventures also gain approval from monetary authority

Hong Kong's downtown skyline and Victoria Harbor are visible in this view from the Peak. (Photo by Ken Kobayashi)

HONG KONG (Nikkei Markets) -- The Hong Kong Monetary Authority on Thursday said it has granted virtual banking licenses to four new entities backed by some of the most influential businesses in the city and mainland China, aiming to spur financial innovation in the former British colony.

The city's de facto central bank has granted the licenses to Ant SME Services (Hong Kong) and to Ping An OneConnect, in addition to Infinium and Insight Fintech HK.

Ant SME is a unit of e-commerce major Alibaba Group Holding's affiliate Ant Financial Services Group, while Ping An OneConnect is a member of major China's Ping An Insurance Group.

Insight Fintech is a joint venture between smartphone maker Xiaomi and AMTD. Infinium is a joint venture involving Chinese tech group Tencent Holdings, Industrial & Commercial Bank of China (Asia), Hong Kong Exchanges & Clearing, Hillhouse Capital and Hong Kong businessman Adrian Cheng.

The four new virtual banks intend to launch their services in around six to nine months according to their business plans, the HKMA said in a statement on its website. Including the approvals on Thursday, the authority has handed out eight virtual banking licenses so far.

The launch of virtual banks in Hong Kong will "certainly" facilitate financial innovation, enhanced customer experience and financial inclusion, Norman Chan, chief executive of the HKMA, said in the statement.

The HKMA had in March given the first such licenses to joint ventures led by BOC Hong Kong (Holdings), Standard Chartered Bank (Hong Kong) and ZhongAn Online P&C Insurance. Last month, it gave the license to Welab Digital.

The authority had last year received a total of 33 virtual banking applications, out of which it had shortlisted eight for detailed due diligence. Adequate financial, technological and other related resources, and a credible business plan, were among the factors considered in the approval process, the HKMA had said in March.

-- Benny Kung

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