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Suning to open new bank
http://www.ecns.cn/business/2013/08-22/78263.shtml
Aug 22nd 2013, 05:55
2013-08-22 14:55 Global Times
Suning Commerce Group Co, a home appliances chain store operator, confirmed with the Global Times Wednesday that it plans to set up a private bank.
In a statement sent to the Global Times Wednesday, Suning said it is "actively applying to establish its bank, which is in line with the government's encouragement for setting up private banks."
However, the company gave no comments on the schedule or progress of its application.
The shares of Sunning closed up 8.43 percent to 7.59 yuan ($1.24) Wednesday on the news.
The State Council, the country's cabinet, released a plan on August 12 to promote the setting up of Âprivate banks to support small and Âmicro-sized enterprises.
Cao Lei, director of China e-Business Research Center, told the Global Times Wednesday that Suning has advantages in operating a bank and will benefit a lot from it.
As a leading online and offline retailer, Suning has large capital to set up a bank due to the long billing cycle in retail industry, usually two or three months, Cao said.
Moreover, its close relationship with numerous suppliers, including many outstanding brands, will enable Suning to win potential bank clients with strong creditworthiness, while its online business can also bring a large number of customers for the bank, he noted.
Cao also said if Suning can successfully open its bank, it will have a new source of profit which will change its current business Âstructure. Considering the profitability of the banking industry, Cao believes Suning will boost its competitiveness through the bank.
Private banks can bring convenience to clients by providing more service choices, and the banking industry will see diversified banks in the future, Bai Tian, a senior analyst of Round Stone Finance Academy, told the Global Times Wednesday.
However, these enterprises Âusually are good at marketing, but not at risk control, which is vital for the banking industry, so risks will increase for private banks run by these firms, Bai said.
Ali Microfinance Service Group, owned by e-commerce company Alibaba Group which has rich experience in Internet financial service, told the Global Times Tuesday that it has no intention to open a bank at present.
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