Bank of China, the country’s largest foreign exchange bank, said on Thursday it was close to forming an auto financial company with partners Dong Feng Motors Co. (DFM) and PSA Peugeot Citroen.
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BOC spokesman Wang Zhaowen told Reuters BOC Insurance Co. would take a 50% stake in the venture, without giving the breakdown in the ownership stakes for the other partners.
BOC reportedly said an agreement in principle had been reached with its partners, but that a formal contract had not yet been signed. The bank did not provide any financial details of the proposed partnership.
Reuters noted the announcement comes as car sales in China are expected to grow 10-15% this year after almost doubling last year to some 2 million units, after Beijing took steps to curb credit to cool an economy in danger of overheating.
BOC reportedly said its auto loan business was growing rapidly. Last year it issued 40 billion yuan in loans for all types of vehicles, while the total non-performing portion of those loans was only 5%.
