Bank of Beijing and ING are to invest CNY3bn ($447m) to set up a new digital bank headquartered in China.
ING will hold a 51% stake in the new digital bank with Bank of Beijing owning the remaining 49%.
Go deeper with GlobalData
A Bank of Beijing and ING JV represents the first Chinese bank with an international bank holding a majority stake.
Netherlands’ headquartered ING first formed an alliance with Bank of Beijing in 2015, taking a minority stake. ING currently has a 13% shareholding in Bank of Beijing, worth around $2.7bn.
ING also has stakes in TMB (Thailand) and Kotak Mahindra Bank (India).
The Bank of Beijing and ING JV aims to counter the growing threat to banking revenue streams from technology firms. In particular, Tencent and Alibaba have been disrupting the market and eating into traditional banks’ margins for several years.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataING is also increasing its investment in its Chinese mainland branches. In particular, ING aims to double the number of its wholesale banking clients in China.
Incumbent Chinese banks lost round one of the innovation battle against the tech giants and have been playing catch up. In particular, the new players have beaten the banks in terms of user interaction and customer experience. Bank of Beijing is a Sino-foreign joint stock commercial bank established in 1996.
Currently, Bank of Beijing operates a branch network of over 600 outlets. It also operates international branches in Hong Kong and the Netherlands. At the end of fiscal 2018 Bank of Beijing’s total assets amounted to CNY2.4trn.
China opening up
The Bank of Beijing, ING joint venture is the latest example of China enabling international banks to access the market.
UBS is first foreign bank to raise its stake to a majority 51% in a China-based securities JV. American Express is setting up a joint venture in China for card clearing and settlement. And S&P is entering China’s credit rating market.
