Baidu-led group applies for banking license

|By:, SA News Editor

Having already launched a wealth management platform for Chinese depositors, Baidu (BIDU -1.4%) is now heading a partnership that's applying for a private banking license. "Of the businesses the Internet will topple they naturally include finance," declares CEO Robin Li.

Baidu, Alibaba, and Tencent have all launched wealth management products, hoping to cross-sell consumers in a country with sky-high savings rates on investment vehicles that deliver much higher returns than those provided by state-owned banks.

Alibaba's (ABABA) Yu'e Bao platform has been especially successful, attracting 81M users who have collectively deposited nearly RMB500B ($81B).

The efforts haven't come without a backlash from incumbents: Three state-owned banks halted interbank deposit transactions with fund manager Tianhong Asset Management after Alibaba applied to buy 51% of the firm for $193M.

But Premier Li Keqiang, who has pushed for a slew of financial reforms, says he supports the "healthy development" of Internet banking services.