• Customers leave a branch of Postal Savings Bank of China in Wuhan, Hebei Province.

Customers leave a branch of Postal Savings Bank of China in Wuhan, Hebei Province. (Photo : Reuters)

State-owned Postal Savings Bank of China (PSBC) is planning to make an up-to $10-billion initial public offering (IPO) as part of its effort to join and compete in the digital world, with assistance from its investors Ant Financial and Tencent Holdings.

Reuters reported that PSBC will work with Tencent and Ant Financial as it plans to offer several Internet-based consumer finance services.

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The bank also said in its IPO prospectus released recently that it will work with Ant and Tencent's WeBank in Internet and mobile finance. It also plans to set up a mobile payment system and develop mobile phone-based services.

The report said that both Ant and Tencent became shareholders in PSBC during the bank's $7 billion pre-IPO investment round late last year.

A source privy to the matter told Reuters that PSBC hopes to leverage on its network of 40,000 branches and its low number of bad loans to back the development of its online financial services.

"Because it's so clean and there's the advent of the new economy that they can leverage, this will be one of the big surprises of the year," the source was quoted as saying.

According to the PSBC prospectus, its plan to offer personal loans and wealth management products online and on mobile is facing challenges.

"If we are unable to successfully respond to these challenges, our business, financial condition and results of operations could be materially and adversely affected," the document said.

Currently, PSBC is offering technology-based services that include online loan applications, self-service banking, status checking of credit card applications and online inquiries about branches.

The report said that PSBC's plans came as several Chinese companies are trying to get into the country's booming online finance market to offer their financial products via the Internet and mobile devices.

The move is expected to help banks tap on clients, especially those in the rural areas who have no access to online banking services.