ZA Bank, Hong Kong’s first and largest digital bank, has become the first among the city’s eight virtual lenders to declare a monthly net profit, just four years since its launch.

The bank says its net interest margin for the first six months of 2024 has increased to 2.21% from 1.87% a year ago, outperforming the industry average, while its net revenue has reached HK$255 million (US$32.7 million), up 46% year-on-year.

“Achieving monthly profitability in just four years is a testament to the strength and sustainability of Hong Kong’s digital banking model,” chief executive officer Ronald Iu says in a media release. “While many of our global peers took six years or more to reach this milestone, ZA Bank’s rapid progress underscores the effectiveness of our strategy and the trust we've built with our users.”

ZA Bank, which received a licence from the Hong Kong Monetary Authority in 2019 and started operations in March 2020, boasts the largest number of highest number of users and customer deposits among Hong Kong’s digital banks by the end of 2023. It claims over 800,000 users, representing 13% of the city's bankable population, with a 25% penetration among Gen Z consumers.

The bank has continued to expand its offerings, including fund and US stock trading capabilities, as well as tailored business banking solutions for local start-ups and small and medium-scale enterprises. In a pioneering move last year, the bank extended its services to Web3 enterprises, further solidifying its position as an innovator in digital banking.

“What’s particularly noteworthy is that our growth and profitability have been entirely organic, driven by genuine market demand and the value we provide to our users. This achievement not only validates our approach but also sets a new benchmark for the digital banking industry in Hong Kong and beyond,” Iu adds.

ZA Bank is owned by Shanghai-based insurer ZhongAn Online P&C Insurance Co. Ltd.