The main Chinese banking regulator, the China Banking Regulatory Commission (CBRC) has given the go-ahead for the start of operations of what will be the country's second completely private bank. Webank has a has a registered capital of 3 billion yuan (just under 500 million U.S. dollars) and its business license covers personal banking, corporate banking and international banking according to the CBRC.
This is the first of five private banks that were approved earlier in 2014 to move forward setting up private banks. Shenzhen-based Webank was the proposed bank from Tencent and should very soon face competition from Hangzhou-based MYbank, from Alibaba's Ant Financial. The strategy is as we discussed before, to help SMEs in China through better access to capital and services.
What is interesting is that it gives Tencent a slight leg up on Alibaba. Previously Alibaba's Ant Financial had really been the tech leader in financial products and services through their Alipay platform, but we've seen increased focus from both Baidu and Tencent to encroach on that territory.
All in all, shaping up to be a pretty interesting 2015...already...