China's Tencent applies for private banking license - media
BEIJING, Sept 13
BEIJING, Sept 13 (Reuters) - Tencent Holdings Ltd, one of China's biggest Internet companies with a market cap of almost $100 billion, has applied for a private banking license, Chinese media reported on Friday.
The company, known for its wildly popular social messaging app WeChat and its lucrative online games, had its submission approved by provincial authorities in Guangdong, said the Southern Metropolis newspaper.
The application will now be assessed by the China Banking Regulatory Commission (CBRC) before it can gain final approval, according to the report.
Tencent's interest in private banking could tie into its Tenpay online payment system, which allows digital transactions for products like WeChat. The firm recently introduced free-to-play games and paid-for stickers to the app, in an effort to monetise its 236 million active users.
"Tencent probably wants to create an end-to-end system for their users, so they never have to leave the comfort and safety of the Tencent world," said Frank Yu, a Beijing-based technology investment advisor and CEO of Kwestr. "There's not really a lot of transaction volume on Tenpay, but they're getting ready for it. WeChat will be a big source of transactions," he said.
Neither Tencent nor CBRC officials were available for comment.
Competitor Alibaba Group, the Chinese e-commerce company whose coming IPO could value it at more than $100 billion, has also been moving into financial products.
It already offers loans to small business using its platforms and its AliPay payment system recently branched into offering money management products to users through Yu'ebao. This allows people to generate interest on money stored in their AliPay account through funds that have partnered with Alibaba.
The China Business Journal reported on Monday that Alibaba had applied for an online banking license, which if successful, would make it China's first Internet bank, with a registered capital of 1 billion yuan ($163.45 million).
Alibaba officials declined to comment on what they called "rumours and speculation".
In August China's cabinet unveiled plans to set up more private banks to boost financial support for cash-starved smaller firms as state banks have channelled the bulk of their loans to state firms and local government vehicles.
Tencent shares hit an all-time high on Thursday, closing at HK$412.80 before falling to their current price of $409.20.
($1 = 6.1180 Chinese yuan)
(Reporting by Paul Carsten; Editing by Matt Driskill)
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