Xiaomi‘s subsidiary Sichuan Yinmi Technology and an agribusiness enterprise New Hope Group established an online bank in China on Tuesday. Earlier this week, the China Banking Regulatory Commission approved the name Sichuan XV Bank, which is how this joint venture is going to be called once it starts operating next year, New Hope Group said in a statement. An unnamed representative from the company also revealed how shareholders of both firms have already signed off on the same name, adding that the online bank is expected to start offering its services shortly. Likewise, Xiaomi confirmed the bank’s official name but declined to give any estimates regarding a potential launch date of Sichuan XV Bank, Reuters reports.
Xiaomi and New Hope Group originally submitted this request to the Chinese regulators back in June. The two companies aren’t the only investors in this joint venture, but they’re by far the largest ones, seeing how they’re holding a 29.5% and a 30% stake in the venture, respectively. The new Internet bank will reportedly focus on serving private individuals, as well as small and medium firms, particularly those focused on agriculture. This business focus is reportedly the primary reason why regulators allowed Xiaomi, New Hope Group, and other investors to open a private bank seeing how most of the existing financial institutions in the country are state-owned and far from being suitable for serving smaller entrepreneurs and private individuals. While Sichuan XV Bank will apparently focus on providing online banking services, the said financial institution is also expected to open several physical locations throughout China.
Both Xiaomi and New Hope Group invested in this joint venture to expand their portfolios, and the Chinese phone maker, in particular, is looking to diversify its revenue streams as much as possible seeing how the smartphone market in the Far Eastern country is getting increasingly saturated. This market situation is also the main reason why Xiaomi recently placed a larger focus on developing IoT devices. It remains to be seen how this venture will affect Xiaomi’s next valuation, though the Beijing-based company is likely perceiving it as a relatively safe bet. More information is expected to follow by early 2017.