The Baixin Bank, a enterprise between Baidu and China Citic Bank, would be the nation’s first lender shaped by an web firm and a standard bank, Baidu stated in a press release.
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Baidu Inc, the country’s biggest online search company, is set to enter the private banking sector by teaming up with CITIC Bank.
Trading resumed on Wednesday, with the stock rising as much as 4 percent. The Internet giant’s partnership will offer users online financial services, which includes consumer credit, small loans, and money market funds. That should help to facilitate data sharing between Baidu and Citic Bank, she said.
Neither firm gave the dimensions of Baidu’s stake within the bank, which nonetheless requires regulatory approval earlier than opening.
The license was granted to WeBank and Mybank by China’s banking regulation authority.
“The institution of Baixin Bank will mark a milestone for web finance in China”, Baidu chief government Robin Li stated within the firm assertion.
More than 20 Chinese banks, including China Minsheng Banking Corp. and Industrial Bank Co. have started so-called direct banks, which operate online rather than through brick-and-mortar outlets, according to Grace Li, a Shanghai-based analyst at Ping An Securities Co.
“This is a huge market because traditional banks can hardly offer such services in rural areas or even target college students due to the high costs required for risk control”, he said.
According to Bloomberg, Baidu has a “mobile application that boasts 500 million users and the application’s payment function has 45 million activated accounts”.
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“Baidu will find a way to build a risk control model by analyzing people’s research requests”. Wealth-management products are among the offerings of such lenders.
