Xiaomi, the Chinese smartphone maker, is now entering into the banking industry through establishing its first private bank in Sichuan province with co-partners.
A wholly-owned subsidiary of the tech company will own a 29.5% stake as the second largest investor in the new banking business, according to a statement filed on June 13 by Chengdu Hongqi Chain, another investor for a 15% stake in the bank. The bank will provisionally be named as “Sichuan Hope Bank”, quoting the name of New Hope Group which will hold a 30% stake in the bank as the biggest shareholder.
Sichuan Hope Bank is expected to become the first mobile internet bank in central western China, says a spokesman for the bank in the statement. The new bank will focus on providing diversified and intelligent financial products for a younger user base, namely those who are familiar with the use of internet and small enterprises.
Xiaomi is trying to increase profits through diversifying its business scope into internet services and financial segments, instead of merely selling mobile phones, according to an analyst with Chinese research firm HCR, as cited by foreign media.
Hence, its latest move of investment into the banking industry appears to fall in line with its business strategy. The tech firm recently has suffered slower growth in smartphone sales amid market saturation in China, with part of its market share snatched by domestic rivals in the first quarter of 2016, according to research firm IDC.