ZA Bank, a virtual bank in Hong Kong, has reported a substantial increase in its financial performance for the past year, marking a positive shift towards operational stability.
The bank’s net interest income rose by 36 percent year-on-year while its management expenses decreased, leading to a 20 percent reduction in losses.
Ronald lu, Chief Executive Officer of ZA Bank, highlighted in a recent interview that the bank’s customer deposits reached HK$11.7 billion by the end of last year, with a notable 50 percent increase in the first quarter of the current year compared to the end of last year.
This deposit surge is anticipated to significantly bolster the bank’s net interest income throughout the year. Despite the overall virtual banking sector in Hong Kong recording losses last year, ZA Bank has decreased its losses due to effective cost management and increased revenue streams.
The first quarter showed strong customer deposit growth, attributed to the bank maintaining relatively high deposit interest rates compared to traditional banks, which reduced their rates post-year-end. The “Savings Pot” launch, offering up to four percent additional annual interest on deposits, further attracted substantial inflows.
Looking ahead, the bank is focusing on its “Banking for Web3” vision, which was announced last year. The bank has provided basic commercial banking services to 100 Web3 companies. It serves as a settlement bank for licensed virtual asset trading platforms, enhancing its service offerings and reducing capital costs through increased deposits.
Ronald expressed optimism about reaching a break-even point by next year, with potential monthly or quarterly break-even within this year, supported by increased assets and interest income from the expanding balance sheet.
The bank also anticipates modest loan growth this year due to high market interest rates affecting customer borrowing decisions. However, financial income from other sources, such as bills from other financial institutions, is expected to contribute significantly to the financial performance of ZA Bank.
Featured image credit: Edited from Freepik
