Liu Minxia, Zhang Hao

    mllmx@msn.com

    TENCENT Holdings received the green light from the national banking regulator Friday to create a private bank in Shenzhen’s Qianhai economic zone in a long-awaited economic reform aimed at bringing competition to China’s banking sector.

    The China Banking Regulatory Commission (CBRC) also gave the nod to two other private banks, one in the northern port city of Tianjin and the other in the eastern city of Wenzhou. Previously, China had just two privately owned banks, China Minsheng Banking Corp. and Ping An Bank.

    The Qianhai bank, named Webank, will have 3 billion yuan (US$484.65 million) in registered capital, with Tencent holding a 30 percent stake, statements on the CBRC website show.

    Two other local investment firms, Shenzhen Baiyeyuan Investment Co. and Shenzhen Liye Group, will fund the lender along with Tencent, with each owning a 20 percent stake. Chairman of Liye, Lin Li, was once the richest person in Shenzhen according to The Mundell magazine.

    It was widely expected that the Tencent-funded bank would be named Qianhai Bank as the economic zone was drawing attention for its attempts to make innovations in financial services. “‘We’ stands for ‘group innovation spirit,’” Tencent said in a separate statement. “We hope to provide innovative and tailor-made services to retail customers and small firms by putting all the resources on the Internet.”

    The bank will open within nine months, according to regulatory rules. Gu Min, a former executive director of Ping An Insurance Group Co. of China, will be the chairman of Webank, sources say.

    Tencent’s rival, e-commerce giant Alibaba, who previously received approval to be among the first to launch a private bank, was not among the initial approvals. Yu Shengfa, vice president of Alibaba’s micro-finance unit, said they are still “actively” applying for a banking license.

    Chint Group, an electrical equipment producer, and polyurethane producer Huafon Group will sponsor the bank in Wenzhou, which will serve companies in the cradle of private enterprises.

    Two diversified companies, Maigou Group and Huabei Group, will set up the third bank in Tianjin with a focus on corporate banking.

    CBRC chairman Shang Fulin said Friday that the first three banks would be put into operation with approval for two more to follow.