GE,Wal-Mart,Shenzhen bank tie up on China credit card (Reuters)
31.10.2006 13:43 Finance
The co-branded card would be Wal-Mart's second in as many months, following a deal with Bank of Communications Co. (3328.HK), which is 19.9-percent owned by HSBC Holdings Plc. (0005.HK) (HSBA.L), Wal-Mart spokesman Jonathan Dong said.
GE Money, the consumer finance arm of General Electric Co. (NYSE:GE - news), will provide technical support for the card venture, which would be unveiled on Friday, a Shenzhen Development Bank spokeswoman said on Tuesday.
The latest card would be offered in affluent southern China, while the Bank of Communications co-branded card is available in the northern part of the country. Both credit cards are dual-currency and can be used inside China or abroad.
Wal-Mart vice chairman John Menzer mentioned the credit card deals in a presentation to analysts in New Jersey on Monday evening, listing them as among the growth opportunities for Wal-Mart's financial services business.
Foreign banks are currently prohibited from independently issuing any type of bank card or setting up card joint ventures in China. HSBC and Citigroup Inc. (NYSE:C - news), two early market entrants, are seeking to become the first companies to do so.
Wal-Mart, which competes with Carrefour SA (CARR.PA) and other global retailers in China, operates 66 stores in 34 cities across the country.
Wal-Mart is planning to buy Trust-Mart, a closely held Taiwan company with 100 supercenters in China, for US$1 billion, sources said last week, which would more than double its presence in the world's most populous country.
U.S. private equity firm Newbridge Capital (NB.UL) bought a 17.89 percent stake in Shenzhen Development Bank for 1.24 billion yuan in 2004, making the U.S. firm the first foreign controlling shareholder of a local bank.
Last October, GE Consumer Finance said that it would pay US$100 million for a 7.3 percent stake in Shenzhen Bank, a deal that hasn't yet been approved by Chinese regulators.
(Reporting by Emily Kaiser in Chicago, Deborah Haynes in London and Joseph Chaney in Hong Kong)
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