A look at Hong Kong’s banking industry
The Hong Kong banking industry
is one of the key components of the city’s financial system. Hong Kong is known to be Asia’s leading financial center and a large concentration of banks
can be found here. More than half of the most important financial institutions
have opened branches in Hong Kong
The banking system allows for three types of financial institutions:
- licensed banks;
- restricted license banks;
- deposit-taking companies.
The Banking Ordinance stipulates the manner in which these banking institutions operate and the deposit business they may conduct. Licensed banks are the only ones that can accept deposits from the public, regardless of their size and maturity term.
Restricted license banks can only take public deposits of at least 500,000 HK$ while deposit-taking companies can accept those of at least 100,000 HK$ with a maturity term of at least three months.
Service providers in the Hong Kong banking sector
Institutions that do not qualify for a full banking license
can apply for the restricted type. This system allows for the existence of a larger number of banking institutions
and service providers. Investors in Hong Kong
can enter the deposit-taking sector and register a company that will provide various services as well as conduct investment banking
Companies operating in the banking sector
will need to comply with the requirements expressed in the Banking Ordinance, have a certain amount of liquidity and capital at all times and submit returns to the Hong Kong Monetary Authority
The financial market in Hong Kong
The largest number of banking service providers in Hong Kong
are licensed banks
. The city also has a large Stock Market
, one of the top three stock markets in Asia. The city’s financial regulatory system is modern and allows for a high degree of transparency and supervision: two key elements that have contributed to the quality of the market. Hong Kong is also an offshore Renminbi center.
Investors who want to provide banking services
and open one of the three types of banks available in the city
must also pay attention to other related fields like risk management
, non-performing loans
, cyber security
and the rapid development of FinTech
or financial technology, the applications or products developed for the financial services industry