(Yicai Global) April 20 -- Bank of Nanjing is still waiting on regulatory approval for its acquisition of a controlling stake in Suning Consumer Finance, online news outlet The Paper reported today, citing Chairman Hu Shengrong, who also said the lender plans to increase the unit’s share capital after the deal closes.

Bank of Nanjing intends to pay CNY340 million (USD53 million) for the 36 percent of Suning Consumer Finance owned by troubled e-commerce operator Suning.Com and CNY47.3 million (USD7.4 million) for the 5 percent held by liquor maker Jiangsu Yanghe Brewery Joint-Stock, it said on March 7. Together with an existing 15 percent, the bank would control 56 percent.

That would will give the listed commercial bank a 56 percent stake in the Nanjing-based consumer finance company, as it already holds 15 percent.

French banking group BNP Paribas, which is the biggest shareholder in Bank of Nanjing, also plans to pay Suning.Com CNY28.4 million (USD4.4 million) for a further 3 percent of Suning Consumer Finance.

At Bank of Nanjing’s first-quarter earnings press conference today, Hu said the deal was a key part of the lender’s development plan, and that it would be “beneficial for the growth of Bank of Nanjing’s retail-related strategies,” according to the report.

The bank will discuss raising Suning Consumer Finance’s share capital at the appropriate time, he said, adding that it will also make arrangements for the company’s business model, development plan and internal organization. The major task for Suning Consumer Finance is “stabilization” this year, Hu said, with the aim of further development in the years to come.

Consumer finance licenses are highly prized in China, as only 30 consumer finance firms have been established in the country so far. Twenty of them have banks as their biggest shareholders.

Suning.Com brought in strategic investors and developed a plan to sell stakes in its consumer finance unit after getting into liquidity problems last year. Suning Consumer Finance had revenue of CNY105.8 million (USD16.5 million) in the first half of last year, and a net loss of CNY34.01 million (USD5.3 million).

In the first quarter of this year, its net profit jumped 22 percent to about CNY5 billion (USD780 million) from a year earlier on a 20 percent gain in revenue to CNY12.3 billion (USD1.9 billion), The Paper said.

Bank of Nanjing’s shares [SHA:601009] closed down 0.5 percent at CNY11.71 (USD1.83) today, giving it a market capitalization of CNY117.3 billion (USD18.3 billion).

Editor: Tom Litting