This article first appeared in The Edge Financial Daily, on November 19, 2015.
HONG KONG: Baidu Inc, the Chinese Internet search company, is teaming up with China Citic Bank Corp to join the wave of online lenders altering a financial industry traditionally dominated by the big state banks.
Citic Bank will own a controlling stake in the planned Baixin Bank Co, with exact shareholdings yet to be determined, the lender told Hong Kong’s stock exchange yesterday. The planned registered capital is two billion yuan (RM1.37 billion) with regulatory approvals still required.
More than 20 Chinese banks, including China Minsheng Banking Corp and Industrial Bank Co, have started so-called direct banks, which operate online, according to Grace Li, a Shanghai-based analyst at Ping An Securities Co.
Baidu is likely to take a bigger stake in the planned venture with Citic Bank than fellow Internet giants Alibaba Group Holding Ltd and Tencent Holdings Ltd hold in their private banks, according to Li. — Bloomberg