Date
18 August 2017
Tencent's Webank has approval to open a branch in Shenzhen. It will not be called Penguin Bank as some had speculated. Photo: Bloomberg
Tencent's Webank has approval to open a branch in Shenzhen. It will not be called Penguin Bank as some had speculated. Photo: Bloomberg

Tencent gets green light for private bank branch

Mainland regulators have given three private banks, including Tencent Holdings Ltd.’s (0700.HK) Webank, approval to branch out in a pilot scheme to channel funds to cash-starved small businesses.

Webank, backed by Tencent, Shenzhen Baiyeyuan Investment Co. and Shenzhen Liye Group, has the go-ahead to open a branch in Shenzhen and will mainly target individuals and smaller businesses, according to China Banking Regulatory Commission chairman Shang Fulin.

Contrary to media speculation, the lender will not be called Penguin Bank. 

Shang said the other banks will be located in Wenzhou and Tianjin and have different marketing and growth strategies.

The Wenzhou bank, founded by Chint Group and Huafon Group, will serve local small and micro companies, individual businesses and residents, as well as clients in rural areas.

The bank in Tianjin, co-founded by Huabei Group and Maigou (Tianjin) Group, will be involved mainly in corporate banking services.

He said the three private lenders will be subject to the same regulations as other banks.

The commission will advise the new banks on corporate governance, draft articles of association, electing directors, senior management and establishing a risk management framework.

It will also work to expand the scheme and lure more private capital into the financial sector.

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JZ/MY/SK

Freelance journalist

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