China search giant Baidu joins local lender CITIC to launch direct bank in online finance push

Photo: Reuters

China CITIC Bank Corp Ltd and Baidu Inc on Wednesday said they plan to set up a direct bank to capitalize on China’s booming online finance market, in the country’s first tie-up between an Internet firm and a lender.

CITIC and Internet search provider Baidu would initially invest 2 billion yuan ($313.34 million) in cash as registered capital for the venture, dubbed Baixin Bank, CITIC said separately late on Tuesday.

CITIC said without providing details that it would take a controlling stake in the direct bank, and that the partners are awaiting a direct banking license. A direct bank offers services over the Internet or telephone instead of through branches.

Baixin Bank would be the latest investment in Chinese online finance where technology giants, financial conglomerates as well as hundreds of startups are offering a range of financial products via the Internet and mobile devices.

Online finance arms of Baidu tech peers Alibaba Group Holding Ltd and Tencent Holdings Ltd already offer such services as third-party payment, small loans and wealth management products.

Traditional lenders, led by Industrial and Commercial Bank of China Ltd , have responded by launching e-commerce platforms and moving financial services to mobile devices.

The latest partnership would combine CITIC’s financial products with Baidu’s massive online traffic data.

CITIC Chairman Chang Zhenming, in a joint statement on Wednesday, said Baixin Bank will “better meet the growing needs” for financial services from credit-starved small businesses.

Baixin Bank is “an entirely new model of ‘Internet + banking’,” Baidu Chairman and Chief Executive Robin Li said in the statement.

CITIC suspended trading of its Shanghai-listed shares on Monday pending an announcement. Trading resumed on Wednesday, with the stock rising as much as 4 percent.

Baidu’s New York-listed shares closed down 1 percent on Tuesday.

($1 = 6.3828 Chinese yuan renminbi)

(Editing by Christopher Cushing)

Also Read: Following Alibaba, Tencent’s footsteps China’s Baidu, CITIC in JV for Internet bank

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Reuters

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.