Xiaomi breaks into banking

Mao’s face adorns all the Chinese banknotes. Image credit: David Dennis.

Gadget maker Xiaomi, China’s most popular phone maker, has thrown US$115 million in capital into founding a new bank that will offer online financial services to young people and small businesses, it emerged today. The private bank has just been granted regulatory approval.

The South China Morning Post reports:

The bank […] will provisionally be called “Sichuan Hope Bank”, as an English name has not been finalised, according to a statement filed by Chengdu Hongqi Chain to the Shenzhen Stock Exchange on Monday.

Xiaomi will be the second-largest investor with a 29.5 percent stake, while Chinese conglomerate New Hope Group will own a 30 percent stake and Chengdu Hongqi Chain will own a 15 percent, according to the filing […]

“The Sichuan Hope Bank will become the first mobile internet bank in central western China,” said a spokesman for the bank in a statement. “It will focus on the needs of the younger demographic and small enterprises.”

Once it launches, Xiaomi’s bank will offer its services nationwide.

The new bank has a total registered capital of US$455.8 million.

The move comes some time after other Chinese web giants, such as Alibaba and Tencent, opened their own private, online-only banks. Alibaba’s MyBank debuted in mid-2015, while Tencent’s WeBank, tied to its popular WeChat messaging app, popped up earlier last year.

Converted from Chinese yuan. Rate: US$1 = RMB 6.58.