China Construction Bank and Santander eye tie-up

The joint venture intends to install 100 village banks in China with $439 million initial capital.

Over the next three years, China Construction Bank (CCB) and Banco Santander are planning to set up a joint financial holding company and open 100 village banks in the country, people familiar with the matter said in a report in China Daily.

The sources said CCB would likely put in 1.8 billion yuan ($263.64 million) and hold a 60 percent stake in the joint venture, while Santander would hold the balance of registered capital of 3 billion yuan ($439.36 million), which could go up to 5 billion yuan ($732.37 million) in three years.

The holding company would hold a 51 percent stake in each of the newly set up village banks.

The CCB proposal, which would create the first financial holding company in the country, and a new model to develop rural finance, is yet to be approved by the State Council, the sources said.