Foxconn strides into financial service business

A motorcyclist rides past the entrance of the headquarters of Hon Hai, which is also known by its trading name Foxconn, in Tucheng, New Taipei city, China, in this December 24, 2013 file photo.[Photo/Agencies]

Foxconn wants to become more than just a contract manufacturer of gadgets for Apple. It also wants to be the banker for the world's electronics supply chain, the Wall Street Journal reported on Tuesday.

Taiwan-based Foxconn, the trade name for Hon Hai Precision Industry Co Ltd, set up six financial-services companies in China last year, providing loans and other financing services to electronics component suppliers, the newspaper said.

Foxconn aims to begin repackaging the loans into financial products within a couple of years and sell them directly to investors, Jack Lee, managing director of Foxconn Financial Service Platform, said in an interview with the Journal.

Foxconn joins a string of domestic tech companies that think they can do better than traditional financial institutions in serving local businesses and consumers with the data they collect from hundreds of millions of mobile devices.

China CITIC Bank Corp Ltd confirmed on Tuesday that it will partner with Beijing-based Baidu, the country's biggest online search firm, to set up a direct bank, which is a bank without any branch network and one that offers services mostly online.

Earlier, Baidu rivals Tencent Holdings Ltd and Alibaba Group Holding Ltd, both gained private banking licenses and started trial operations.

MYbank, which is 30 percent-owned by Ant Financial Services Group, has a registered capital of 4 billion yuan. Ant Financial is a former subsidiary of Alibaba and is still owned by Alibaba chairman Jack Ma and his colleagues.

Webank, whose 30 percent stake is held by Chinese Internet giant Tencent, has registered capital of 3 billion yuan and its business scope includes personal banking, corporate banking and international banking.

Foxconn derives about half its revenue from Apple, but the company is trying to expand into more higher-margin businesses, including component manufacturing, e-commerce, robotics and financial services, the Journal said.

Foxconn is also setting up a 300 million yuan private-equity fund to invest in Chinese startups, Lee added.