Spain’s BBVA and Chinese financial
conglomerate CITIC have signed agreements for the joint development
of businesses in two of China’s highest growth markets: car
financing and private banking.
BBVA said it will hold a 35 percent stake in
an auto lending joint venture business, which will include an
initial investment of CNY500 million ($73 million), to be run in
conjunction with China Citic Bank.
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Under terms of the second venture, BBVA will
take a 20 percent stake in China Citic Bank’s private banking
business.
The partners aim to reach a 5 percent share of
the Chinese market in each segment within a five-year period, BBVA
said. The bank says it will base the car financing push on its
established consumer finance models in several countries, including
Spain, Portugal, Italy, Mexico and Chile.
In 2009 the Chinese car market will surpass
what has traditionally been the number one market in the world,
namely the US, according to BBVA. It says China’s car market is
growing at an annual rate of more than 10 percent, with 2.67
million cars sold in the first quarter.
BBVA, which owns a 10.07 percent stake in
China Citic Bank, said in a statement: “BBVA can afford to extend
its investments in China in stark contrast to decisions being
announced by other international banking groups which have been
forced to wind down [Chinese] investments.”
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