China’s Citic Bank and Baidu to set up online bank venture

(South China Morning Post) Citic Bank and mainland Chinese internet search engine giant Baidu plan to set up a direct, or branchless bank venture that could see the mid-tier lender tap into Baidu’s vast online users network to provide them investment products and loans online.

The bank will have a controlling stake that has yet to be determined in the new venture, to be called Baixin bank, Citic Bank said in a statement to Hong Kong Exchanges and Clearing on Wednesday.

“The board approved the proposed cooperation between the bank and Baidu to establish a direct bank … subject to the approvals of regulatory authorities,” it said, adding its partner will be Fujian Baidu Bo Rui Netcom Science and Technology.

Baidu last month said it had 643 million of mobile search active users in September, 26 per cent more than the same month a year earlier.

Direct bank is a bank without a branch network. It offers its services remotely via the Internet or telephone. Over 20 mainland banks have launched operations that resemble direct banking, starting with Bank of Beijing in 2013.

Separately, Citic Bank said its board has approved a plan to set up China Citic Bank Asset Management with a proposed registered capital of 2 billion yuan.

Its establishment is subject to regulatory approvals.

Trang of Citic bank will resume on Wednesday. It was suspended Monday afternoon pending announcement of a “proposed external investment.”