Citic, BBVA to open car loan joint venture in China

Shanghai, July 24 (Gasgoo.com) Chinese banking group China Citic Bank Corp Ltd. and its Spainish partner Banco Bilbao Vizcaya Argentaria SA (BBVA) will set up a joint venture to develop car loan business in China, the Chinese bank announced yesterday in Beijing, local media reported.

The Beijing branch of Citic's auto financing center was launched yesterday. Consumers to buy cars via Citic will be able to get at least 20% down payment on the car to pay off within five years with 10% off the interest rate. Citic said it will open auto loan branches in its 600 branches nationwide in preparation of the auto loan joint venture with BBVA.

BBVA said it will hold a 35% stake in the auto loan joint venture business, which will include an initial investment of 500 million yuan ($73.2 million). The two partners aim to reach a 5% share of the China's auto financing market within a five year period.

China's auto market is growing at an annual rate of more than 10%, with 6.1 million cars sold in the first half this year. Meanwhile, the number of wealthy individuals in the country is estimated to grow at an annual rate of 7% this year.

Currently, there are some 30,000 auto dealers in China, of which 2,000 already have a direct relationship with Citic. Last year, Citic loaned 100 billion yuan to 35 auto dealers.

BBVA, Spain's second-largest bank by assets behind Banco Santander SA, owns a 10.07% stake in China Citic Bank. Their auto loan joint venture is awaiting China's regulatory approval.