The privately owned bank led by a Shenzhen-based consortium, which includes Tencent and 9 other investors, obtained approvals to start operations from the China Banking Regulatory Commission.
We believe Tencent and the privately owned bank will build close ties leveraging its huge user base, which has 468m and 542m monthly active users in Weixin/WeChat and Mobile QQ in smartphones, respectively, by end of 3Q14, as well as its big data capabilities. Despite that the detailed business models and service offerings have yet to be announced, we believe it can strengthen existing service offerings in payments, wealth management and money transfer. In the long term, we believe the potential synergies (e.g., micro-loan financing) with public accounts have yet to be exploited. In addition, the approval also lessens part of the concerns for Internet companies participating in financial services in early March 2014.
