China's Tencent, eBay join messaging app Kakao's bid for new South Korean internet bank
Kakao Corp, the operator of South Korea’s largest mobile messaging app, said Tencent Holdings and eBay have joined its bid for a new South Korean internet bank license.
Tencent and eBay will make their investments through subsidiaries, which are expected to take stakes of 4 per cent or less in the bank should a license be gained, a Kakao spokesman said.
He declined to comment on financial terms.
South Korea is expected to grant one or two licenses for Internet banks this year. Kakao’s bid is one of at least three known bids.
An internet bank provides banking and financial services without physical branches.
Tencent launched WeBank, China's first private-sector internet bank, in January, with a pledge to support small businesses that has been seen as a challenge to credit card issuers and other established lenders.
However the bank was straightjacketed by a number of regulatory hurdles that saw it banned from accepting deposits and opening branches.
In July, Tencent said the bank had provided 800 million yuan (US$130 million) worth of micro-loans in the previous two months as it targeted this as its first major business area, according to media reports.
Meanwhile, Chinese e-commerce giant Alibaba became an online financial network by launching a new internet bank in June, two years after it launched a personal wealth fund called Yu'e'bao.
Run by Ant Financial, the group’s financial arm, MyBank was initially offering limited services due to security concerns from Chinese authorities regarding its facial recognition technology, according to media reports.
The new bank is “not for the rich, but for the little guys,” said executive chairman Eric Jing.
Unlike Yu'e'bao's focus on savings, MyBank will channel its energies into loans, including to rural areas in China and micro enterprises, the company said.
Private banks like these compete with a number of Chinese start-ups that offer peer-to-peer (P2P) loans. These include Beijing-based Renrendai; Jimubox, which is backed by Chinese electronics maker Xiaomi, often dubbed "China's Apple"; and Edai, funded by Softbank.
Additional reporting by Staff Reporter