Suning Leads Declines by Bank License Applicants: Shanghai MoverBloomberg News
Suning Commerce Group Co. led declines in shares of Chinese companies that have sought to open privately owned banks after a newspaper reported that the new lenders will be limited to their home provinces.
Suning, China’s largest electronics retailer by market value, fell 6.4 percent to 12.83 yuan at 2:15 p.m., set for the biggest one-day drop since June. Kingfa Sci. & Tech. Co. slipped 3.9 percent to 6.13 yuan and Guangzhou KingTeller Technology Co. dropped 2.7 percent to 6.90 yuan in Shanghai. The city’s benchmark composite index lost 0.3 percent.
The companies are applying for bank licenses as China’s government seeks to increase competition in financial services and reduce the state’s role in reviving the world’s second-largest economy. Regulators will select two applicants per province and may ban shareholdings larger than 20 percent, the Guangzhou-based New Express newspaper reported.
“The reported rules we’re seeing are much tighter than people thought previously, mainly the quota on licenses,” Rainy Yuan, a Shanghai-based analyst at Masterlink Securities Corp., said by phone. “Regulators may allow capable private companies to enter banking, but they would want a controlled pace” of liberalization.
Regulators may also restrict individuals’ ownership in the new banks to 2 percent, New Express said. Limits on leverage and capital may keep the lenders from growing as large as potential owners had estimated, Yuan said.
— With assistance by Nathaniel Espino, and Dingmin Zhang