Baidu, CITIC cement partnership
Update Date：2015-11-18 10:03:33 Source：BeiJing Tannet Views：895
Baidu Inc, the country's biggest online search firm, is set to enter the private banking sector byteaming up with a local bank.
China CITIC Bank Corp Ltd confirmed on Tuesday that it will partner with the Beijing-basedBaidu to set up a direct bank, which is a bank without any branch network and one that offersservices mostly online.
Without disclosing any details, CITIC Bank said it will hold a joint conference with Baidu onWednesday to officially cement the partnership. Baidu confirmed that it will hold a newsconference with CITIC Bank but declined to reveal further information.
The State-owned CITIC Bank, which is China's seventh-largest commercial bank by assets, hashalted the trading of its shares since Monday.
Despite being a relative latecomer in China's nascent online finance sector, analysts said the tie-up with CITIC Bank will give Baidu access to China's Internet-enabled private banking sector.The search giant has been fighting for a banking license since early 2014.
Robin Li, chief executive officer of Baidu, has said on numerous occasions that his companywould like to make forays and eventually "disrupt" the traditional finance sector in China.
Li Chao, an analyst with the Beijing-based iResearch Consulting Group, said Baidu is keen tocatch up in online banking services as both of its rivals－Tencent Holdings Ltd and AlibabaGroup Holding Ltd－have gained private banking licenses and have started trial operations.
"Online banking services usually target the more grass-root customers, who find it difficult to getloans from traditional banks due to lack of credit information," said Li.
Internet firms, such as Tencent and Alibaba, he said, can leverage their massive socialnetworking and online shopping data and make decisions about whether or not to offer smallloans to certain people.
"This is a huge market because traditional banks can hardly offer such services in rural areas oreven target college students due to the high costs required for risk control," he said.
Ma Tao, an analyst with Internet consultancy Analysys International, said Baidu has already rolledout products to predict trends on stock markets by analyzing the search requests it receives fromusers.
"Baidu will find a way to build a risk control model by analyzing people's research requests. Dueto its dominant position in China's search market, it will have an advantage over peers in sellingwealth management products online, something that will immensely benefit the new bank," hesaid.
The article transsshipment from China Daily
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