(Chinese Version)

Finally, Suning has officially been conferred with a bank certificate, surpassed Baidu and JD and caught up with Alibaba’s Ant Financial, which has already been conferred with a variety of finance certificates up till now.

On the evening of December 21st, Suning Commerce Group announced that they had already received “CBRC’s Approval Letter over Establishing Jiangsu Suning Bank Co., Ltd” from China Banking Regulatory Commission and be permitted to establish a private bank called “Jiangsu Suning Bank” (hereafter referred to as “Suning Bank”) in Nanjing, Jiangsu province.

With a proposed registered asset of 4 billion RMB, Suning Bank is co-initiated by Suning Commerce, SolarEast and JSTI, which subscribed 30 per cent, 23.60 per cent and 9.80 per cent of the total capital stock of Suning Bank, respectively. That is to say, Suning Bank will become the 13th private bank in China, the 8th approved in 2016 and 2nd approved this month.

According to 21 JINGJI.COM’s report, Huang Jinlao, former vice president of Huaxia Bank and standing vice president of Suning Finance Group, is to be appointed president of Suning Bank. After leaving Huaxin Bank in 2015, Huang was appointed standing vice president of Suning Finance Group and in charge of Suning Commerce’s finance and financial service business.

Suning enjoyed rapid growth in finance business sector in the past two years. Together with this “Private Bank Certificate”, Suning has already been conferred thirteen relevant certificates up till now, including “Third-Party Payment”, “Consumer Finance”, “Micro-Loan”, “Commercial Factoring”, “Fund Payment”, “Fund Sale”, “Equity Fund”, “Insurance Sale”, “Enterprise Credit Reporting”, “Pre-Payment Card”, “Overseas Payment”, “Finance Leasing”, etc.

It seems that comprehensive management of financial services has already become a common trend for large-scale internet finance companies. Since entering payment business in 2011, Suning has already carried out various relevant business, including “Payment Account”, “Investment and Financial Management”, “Consumer Finance”, “Enterprise Loan”, “Commercial Factoring”, “Crowd Souring”, “Insurance”, “Prepayment Card”, etc.

01 Caijing once did a thorough analysis over Suning’s business layout in finance market: in the upstream, Suning has established micro-loan firms and commercial factoring companies targeting mainly suppliers; in the midstream, Suning has launched internet insurance sale business (in hopes of providing insurance service for after-sale and logistics suppliers) as well as fund sale business (in hopes of improving users’ loyalty); in the downstream, Suning has established consumer finance company and aimed to provide consumer-level credit loan service.

As early as November 2013, it was already reported that Suning Commerce was preparing to apply for the establishment of Suning Bank and had already registered for the domain name “suningbank.com”. “Now that government is encouraging private capital to establish private banks, we do have plans to establish our own private bank and has already been preparing for relevant materials,” said a respondent from Suning’s Chairman Secretary Office. Suning officially established its Finance Business Group in 2013 and Suning Finance in March, 2015. At the same year, Suning Commerce teame dup with five other companies (Bank of Nanjing included) and co-established “Suning Consumer Finance Co., Ltd”.

Although Suning has kept a low profile in the past few years in internet finance business, it gradually sped up and continued to have big moves in 2016. This April, Sunign Finance Service Co., Ltd was established with an initial financing of 6.667 billion RMB. On April 24th, Suning announced that it planned to integrate all its financial businesses, including third-party payment, supply chain finance, financial management, insurance sale, fund sale, crowd-souring, prepayment card, etc. and establish a comprehensive financial service platform.

Up till now, Suning Finance has gained over 10 million new active users in 2016 and its transaction volume doubled compared to last year and reached over 400 billion RMB. In 2015, Suning Finance’s revenue and net profit reached 421 million RMB and 68 million RMB, an increase of 254.9 per cent and 435.54 per cent, respectively. For the first three quarters of 2016, Suning Finance’s profitability continued to grow.

For a long time, major Chinese e-commerce companies have been competing to apply for various kinds of finance certificates. From Tencent’s WeBank, Alibaba’s MY Bank, to Baidu’s Baidu CITIC Bank and Suning’s Suning Bank, we can see that internet banks have already become the major force in private banks.

Besides Suning Bank, are there any other private banks in China? How’s their business going on right now?

After some research, we find that CBRC has already approved eight private banks in 2016 and 13 private banks in total. Besides Chongqing Fumin Bank, Sichuan Hope Bank, Hu’nan Sanxiang Bank, Anhui Xi’an Bank, Fujian Huatong Bank, Wuhan Zhongbang Bank, CBRC has granted certificates to two more private banks today, including Beijing Zhongguancun Bank and Jiangsu Suning Bank.

Established in 2014, the first batch of pilot private banks included Jincheng Bank, Huarui Bank, Minshang Bank, MY Bank and WeBank. Among them, WeBank focused its attention mainly on individual deposit and micro-loan, Jincheng Bank emphasized on public loan and deposit, MY Bank concentrated on micro deposit and loan, while Minshang Bank and Huarui Bank attached their emphasis on some “special areas”.

Shang Fulin, chairman of CBRC, pointed out in City Commercial Bank Convention 2016 that CBRC would approve new private banks in an orderly and steady manner, and revealed that CBRC had completed research on fourteen applicants and officially issued certificate to three applicants.

Near the end of 2016, CBRC seemed to have speed up its approval process. That’s probably why three private banks’ application have already been approved simply in December.

Appendix: Development of Suning’s Business Lyout in Internet Finance

In 2011, Suning first came up with its strategic plan in supply chain finance and started to enter payment business.

In July 2012, Suning EasyPayment Assistant received “Third-Party Payment” certificate.

In December 2012, Chongqing Suning Micro-Loan Co., Ltd was established, which launched Suning micro-loan business and targeted mainly suppliers who needed short-term fund.

In 2013, Suning Finance Business Division was officially established.

In October 2013, Suning Commercial Factoring Co., Ltd was co-established by its full-asset subsidiary “Hong Kong Suning Finance Co., Ltd” and Suning Electronics Group, with a registered asset of 55 million RMB. The company mainly provided financial services for suppliers, including trade financing, client credit research, receivable account management, credit risk guarantee, etc.

In January 2014, Suning Financial Management was officially launched.

On February 17th, 2016, Suning Insurance Sale Co., Ltd was approved by China Insurance Regulatory Commission. Next, the company continued to be granted certificate to sell insurance products, collect insurance fee, loss research and compensation, etc. on proxy.

In October 2014, Suning Commerce transferred 4.011 billion RMB to its eleven subsidiaries and established its own private equity fund.

In March 2015, Suning Finance was established and became a subsidiary of Suning Commerce.

In April 2015, Suning crowd-sourcing platform was launched and set to provide online crowd-sourcing service (product-based and equity-based) together with Suning’s offline outlets across China.

In May 2015, Suning Commerce teamed up with five other companies (Bank of Nanjing included) and established Suning Consumer Finance Co., Ltd, with a registered asset of 300 million RMB. The company first launched individual credit loan service and provided micro loans for its consumers both online and offline. An individual consumer could borrow up to 200,000 RMB via the service.

In September 2015, Suning Credit Reporting was established; in January 2016, Jiangsu Suning Credit Reporting Service Co., Ltd passed China Central Bank’s Enterprise Credit Reporting Business Research.

In March 2016, Nanjing Suning Fund Slae Co., Ltd received the “Certificate for Fund Sale Business” from CBRC and became qualified in selling bond investment fund and providing settlement business for fund sale payment.

On April 24th, 2016, Suning announced that it planned to integrate all its financial businesses, including third-party payment, supply chain finance, financial management, insurance sale, fund sale, crowd-souring, prepayment card, etc. and establish a comprehensive financial service platform.

In September 2016, Suning Renting Co., Ltd was registered and established in Tianjin, a key component in Suning’s comprehensive financial platform.

On December 21st, 2016, Suning Finance Group announced that it would upgrade its EasyPayment Assistant to Suning Finance APP the next day. It is reported that Suning is to provide various services, including payment, financial management, loan, crowd-sourcing and insurance, etc via the new APP.

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Translated by Levin Feng (Senior Translator at PAGE TO PAGE), working for TMTpost.