Postal Savings Bank Of China Seeks To Become A Player In Digital Finance

Postal Savings Bank of China (PSBC) aims to transform itself from a brick-and-mortar lender into a digital player, as part of its plans for a $10 billion IPO.

Reuters, citing both the state-owned bank's IPO prospectus and people familiar with its plans, said, "PSBC plans to work with online services firm Tencent and Ant, an online payments affiliate of e-commerce giant Alibaba Group Holding Ltd BABA, to launch a range of internet-based consumer finance services."

"PSBC's technology-enabled services currently include online loan applications, self-service banking, checking the status of credit card applications and making inquiries about branches, according to its website and the prospectus," Reuters stated.

Furthermore, Reuters reported that PSBC's plans are within the greater context of a variety of companies hoping to join China's booming online finance market, "where tech giants and hundreds of startups offer a range of financial products via the internet and mobile devices."

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"[T]he bank with a network of 40,000 branches across China said it wanted to deepen cooperation with Ant and Tencent's online finance arm, WeBank, in internet and mobile finance," said Reuters.

According to the report, PSBC "plans to 'actively explore' the setting up of a mobile payment system and speed up the development of mobile phone-based services [...] Both Ant and Tencent, China's biggest social network, came on board as PSBC shareholders as part of a nearly $7 billion pre-IPO investment round late last year."

PSBC, which has reported extremely low levels of bad loans as compared to its peers, hopes to "leverage its vast physical network across the country to support online financial services development, said a person familiar with the bank's plans."

"Because it's so clean and there's the advent of the new economy that they can leverage, this will be one of the big surprises of the year," Reuters said, citing a person who declined to be named, but who is intimately familiar with the matter.