Baidu and China Citic plot Internet bank JV

Baidu and China Citic plot Internet bank JV

The march of China's tech giants into banking continues unabated, with news that Internet search company Baidu is to establish an Internet bank in partnership with China Citic.

Baidu is looking to emulate the success of local e-commerce groups Tecncent and Alibaba, which have both opened online banks this year following the relaxation of bank licensing rules by Chinese authorities.

Much like its peers, Baidu has made no bones about its interest in entering the banking market having launched an online payment service, Baidu Wallet, in April last year.

The linkup between Baidu and China Citic Bank has yet to be confirmed, but has received widespread media coverage following a report in 21st Century Business Herald citing unidentified sources.

Shares in China Citic were halted on the Shanghai Stock Exchange following the leak, pending the announcement of a proposed external investment.

Update In a statement late Tuesday, CITC confirmed a joint investment with Baidu of 2 billion yuan ($313.34 million) in cash as registered capital for the venture, dubbed Baixin Bank.

CITIC said that it would take a controlling stake in the direct bank, and that the partners are awaiting a direct banking license.

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