Bank aims to help alleviate poverty while creating a profitable business
Ping An Bank Co Ltd plans to set up a 50 billion yuan ($7.5 billion) poverty alleviation fund in southwestern Guizhou province to help develop and upgrade industries there.
The fund will be used to promote Guizhou's infrastructure, tourism, agriculture, ecological protection and other industries.
Shao Ping, president of Ping An Bank, said the bank's development in Guizhou is in line with the province's strategy of developing "big poverty alleviation, big data, big tourism, big ecology" and the two sides can cooperate in those fields.
"We place high expectations on Guizhou's future development," Shao said in talks with Meng Qiliang, vice-chairman of the Guizhou provincial committee of the Chinese People's Political Consultative Conference, in Shenzhen on Tuesday.
"Ping An Bank has advantages in offering comprehensive financial services and Guizhou has specialty industries, like baijiu or distilled white liquor. There is much room for cooperation between the two sides."
The Shenzhen-headquartered commercial lender will set up a branch in Guizhou this year. "By establishing a Guizhou branch, we will strengthen cooperation with Guizhou to help promote its economic growth," said Shao.
Meng said poverty alleviation is a key work of Guizhou, which aims to build a moderately prosperous society for its people by 2020. Gross domestic product of the province accounted for 1.55 percent of the country's total in 2015. About 4.93 million people from Guizhou's rural areas were living in poverty by the end of 2015.
"Guizhou is also applying for approval from the central government to build an inland open economic pilot zone and that will bring great opportunities to Ping An Bank," Meng said.
Yu Lingqu, a researcher from the finance and modern industry research center at the China Development Institute, a Shenzhen-based think tank, said setting up the fund will help Ping An Bank enhance its profitability in a comprehensive way at a time when commercial banks are changing their business model.
"At present, it has become increasingly difficult for banks to make money from deposit-loan interest rate differentials," Yu said.
"Under the circumstances, developing intermediate business is a good way for them to make profits. The establishment of the Guizhou fund will also bring fund trusteeship, financial consulting and many other businesses to Ping An Bank, helping enhance its profitability comprehensively."
