Alibaba affiliate wins China approval to jointly set up bank

Alibaba Group Holding Ltd.'s finance affiliate won a bank license in China as the e-commerce group that completed a record initial public offering in New York this month expands its financial-services operations.

The China Banking Regulatory Commission approved a bank in Hangzhou of Zhejiang province with four founders, according to a statement posted on the regulator's website today. Alibaba's Zhejiang Ant Small & Micro Financial Services Group Co. affiliate will own 30 percent of the lender, and a Fosun Group subsidiary will hold 25 percent, according to the statement.

Zhejiang Ant Small, which is controlled by Alibaba's billionaire Chairman Jack Ma, already owns a small-business lender, a money-market fund known as Yu'E Bao, and a Paypal-like service called Alipay. The e-commerce group follows Tencent Holdings Ltd. in winning approval for banking services, as part of a trial program that the CBRC made public in March to create five privately owned banks focused on smaller businesses that have limited access to credit.

The other two shareholders will have an 18 percent and 16 percent stake in the bank, and the regulator's Zhejiang branch will approve additional investors, according to the statement. Zhejiang Ant Small and its co-founders have six months to complete preparations for the lender, the statement showed.

Separately, JuneYao Group Co. and Shanghai Metersbonwe Fashion & Accessories Co. won approval to set up a bank in Shanghai, the CBRC said today. JuneYao will own a 30 percent stake and Shanghai Metersbonwe will hold 15 percent, according to a statement on the regulator's website.

After preparations are completed, the new banks will still need approval from their local CBRC branches before they can open, the regulator said.

Internet company Tencent was among those allowed to establish three privately owned lenders in the cities of Shenzhen, Wenzhou and Tianjin, the regulator said in July.

Alibaba completed the biggest initial public offering ever this month by selling $25 billion of stock to investors keen to tap into the world's biggest pool of Internet users.

To contact Bloomberg News staff for this story: Zhang Dingmin in Beijing at dzhang14bloomberg.net To contact the editors responsible for this story: Andreea Papuc at apapuc1bloomberg.net Russell Ward, Paul Panckhurst