Tencent and Alibaba licenced to compete world’s biggest banks to offer Hong Kong banking

Tencent and Alibaba are set to compete with some of the world’s biggest banks including HSBC and Standard Chartered as Hong Kong opens up its market to online competitors. The Hong Kong Monetary Authority has issued virtual banking licences to China’s top technology groups, adding to the growing number of companies that have already been approved to provide digital services in the Asian financial hub.

China’s Xiaomi, the world’s fourth largest smartphone maker, and PingAn, the world’s largest insurer, were also granted a licence on Thursday by the city’s banking regulator, which calls the licences a “milestone” for the city. The Chinese-led companies join a number of groups already approved in March and April. Many Chinese companies have been granted licences, including Zhong An Insurance and Ctrip.

There are also traditional banks that have been approved, such as Bank of China and Standard Chartered. Tencent’s joint venture partners include Industrial and Commercial Bank of China, the city’s stock market operator Hong Kong Exchanges and Clearing. Other partners include Hillhouse Capital and Hong Kong entrepreneur Adrian Cheng. Alibaba affiliate Ant Financial was also granted a licence. Goldman Sachs analysts have estimated that about $15bn, or 30 per cent, of the city’s total banking revenue, is available for the taking. More

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