Baidu is first Chinese tech giant to obtain license for consumer finance operations
May 20, 2019 (China Knowledge) - Du Xiaoman Financial, which is Baidu’s Financial Services Group (FSG) business arm, acquired major shares in a northern Chinese license-holding firm, Harbin Bank Consumer Finance Co., Ltd. This acquisition allows Baidu to expand into the consumer finance sector.
According to official reports from the Chinese banking regulator, China Banking and Insurance Regulatory Commission (CBIRC) on 16 May, approval to a registered capital increase and equity restructuring was given to Harbin Bank Consumer Finance Co., Ltd.
Harbin Bank boosted its registered capital to RMB 1.5 bln, from RMB1.05 bln. Baidu's Du Xiaoman Finance made a capital contribution of RMB 450 mln in this process, which made them the second bigger shareholder via a 30% equity stake.
In April 2018, Baidu expanded into consumer finance business by selling a majority share in its FSG business to a consortium of private equity firms in a deal worth USD 1.9 bln.
Consumer finance business is referred to services like credit and wealth management. The consumer finance space is dominated by Chinese Tech giant, Tencent, and Alibaba.
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