(Yicai Global) July 25 -- Major commercial lender China Merchants Bank has pulled the plug on a direct banking joint venture with JD.Com’s fintech unit after working on the project for the past five and a half years.

CMB’s board decided to withdraw an application to open China Merchants Tuopu Bank with Jingdong Digits Technology Holding, the Shenzhen-based lender said in a statement on July 22, without explaining the move. The project’s termination will not impact CMB's operations, an executive at the bank told Yicai Global.

CMB unveiled plans in February 2017 to establish a wholly-owned direct banking entity with independent legal status and registered capital of CNY2 billion (USD296 million), in which as much as 30 percent could be available to strategic investors in the future.

In December 2020, regulators approved preparatory work on the joint venture, with Jingdong Digits’ unit Wangyin Online Beijing Business Service holding the minority stake.

In the Chinese mainland there are currently only two direct banking entities with independent legal status: Citic aiBank, a JV between Citic Bank and tech giant Baidu, and PSBC Ubank, which was launched by Postal Savings Bank of China.

China Merchants Tuopu Bank would give full play to the partners’ advantages to improve client acquisition, risk control, and operational capabilities, and to provide users with more efficient, cheaper, and better quality financial services with the support of technologies and talent, CMB said in an article published soon after it received regulatory approval to set up the JV.

Shares of China Merchants Bank [SHA: 600036] rose 0.7 percent today to close at CNY35.85 (USD5.31) each. The broader Shanghai market fell 0.6 percent.

Editors: Xu Wei, Futura Costaglione