One of China’s big state-owned banks has grabbed preliminary approval from Chinese regulators for the launch of a new consumer finance company.
On 27 September China Construction Bank (CCB) announced that it had obtained approval from the China Banking and Insurance Regulatory Commission (CBIRC) for plans to launch its own consumer finance company with two other investors.
CCB will hold an 83.33% share in the proposed consumer finance company in return for a capital contribution of 6 billion yuan. The company will be a tier-1 share-controlled subsidiary of CCB, with total registered capital of 7.2 billion yuan.
The two other investors – department-store giant Wangfujing Group (王府井集团股份有限公司) and Beijing Municipal State-owned Assets Operating Co., Ltd. (北京市国有资产经营有限责任公司), will hold equity stakes of 11.11% and 5.56% respectively.
Following the completion of preparations for the establishment of the consumer finance company, CCB said it would apply with regulators for the official commencement of operations.
CCB said that the launch of the consumer finance company is for the purpose of “implementing national strategies for the expansion of domestic demand; expediting the development of the consumer market, and employing specialised operations to expand the coverage of consumer finance services.”
CCB said that the consumer finance subsidiary would seek to “provide innovative products and services, and satisfy pluralised, multi-tier consumer demand,” as well as “implement the concept of financial inclusion and further lay roots in the field of consumer finance.”
The board of CCB reportedly first approved a proposal for the establishment of a consumer finance subsidiary back in June 2019, as well as a capital contribution of 6 billion yuan.