July 25, 2014 / 9:26 AM / 3 years ago

China gives green light for three private banks

BEIJING, July 25 (Reuters) - China’s banking regulator has approved the setting-up of three new banks wholly funded with capital from private firms, mostly with regional roots, which will introduce the first private lenders into a sector dominated by state giants.

Beijing has long promised to open some state-controlled industries to private firms to help energise sectors such as the railways, civilian airports, sea ports, oil and gas exploration, telecommunications and banking, but progress has been slow.

One of the new banks will be located in the Qianhai economic zone in southern China’s Guangdong province and funded by Internet company Tencent and two local firms, Shenzhen Liye Group and Baiyeyuan Investment Company, the China Banking Regulatory Commission (CBRC) said on Friday

The other two lenders, to be set up in Wenzhou in eastern China’s Zhejiang province and the northern port city of Tianjin, will be funded by local private firms including listed companies Zhejiang Chint Electrics and Zhejiang Huafon Spandex .

“The three banks will have their own specialities in market positioning and development strategies, but they have the common goal of supporting the real economy and providing efficient and differentiated financial services,” CBRC chairman Shang Fulin said, according to a statement on the regulator’s website, (www.cbrc.gov.cn).

The CBRC would continue to provide guidance for companies eligible to set up private banks and would expand the pilot scheme to other regions at an appropriate time, it said. (Reporting by Aileen Wang; Editing by Alan Raybould)

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