Shenzhen Development Bank (SDB) began issuing co-branded credit cards yesterday in alliance with US retailing giant Wal-Mart.

The Shenzhen-listed medium-sized lender's move is aimed at expanding its retail business by taking advantage of Wal-Mart's wide customer base.

Its strategic partner and consumer finance arm of General Electric, GE Money, will provide technical support for the card.

The co-branded card, named Wal-Mart Changxiang Card, would allow people to enjoy a rebate of up to 1 per cent on any purchase, which can be used to exchange goods of the same value in any Wal-Mart Supercentre or SAM's CLUB store across the country.

As a Visa and China UnionPay dual labelled credit card, the Wal-Mart plastic money will be dual-currency and can be used both on the mainland and abroad.

"The Wal-Mart Credit Card is the result of deep cooperation between SDB and Wal-Mart in the mainland's retail and financial markets," SDB Vice-president Liu Baorui told a press conference yesterday. The deal was finalized after a 14-month negotiation.

But SDB is not the first to issue Wal-Mart credit cards on the mainland. Bank of Communications (BoCom), the mainland's fifth-largest lender was the first to do so in September.

Though there is speculation that the SDB co-branded cards would be offered in southern China to avoid functional conflicts because BoCom ones are already available in the northern part of the country, neither Wal-Mart nor SDB clarified the matter.

"First, we will accept applications in Shenzhen, our home base, and then discuss with Wal-Mart on which cities we could cover," SDB spokeswoman Xu Shaomin said. Hence, no timeframe has been fixed for a launch in another city.

Wal-Mart (China) Investment Co's Director of Finance Thomas Chui refused to comment on the co-branded card with BoCom, 19.9 per cent of whose shares are held by HSBC Holdings Plc.

SDB, in which US buyout firm Newbridge Capital holds 17.89 per cent shares, has announced a strong profit surge for the first nine months of the year.

Its net profit soared 197 per cent year on year to reach 890 million yuan (US$112.7 million), 186 per cent more than in 2005, because of a robust growth in the bank's retail business.

"Our strategy is to turn SDB into a leading retail bank. The credit card will play an important role during this process," Liu said.

Though the capital input of GE Money, which agreed to take a 7.3 per cent stake in SDB for US$100 million, was delayed because of a failed State shares reform, Liu said both parties were patiently waiting for the official approval.

"SDB and GE Money already have strategic cooperation to further our partnership... jointly launching more new credit cards and finance banking products to meet the market demands," Liu said.

GE Money, based in Stamford, USA, offers a range of consumer financial products, including credit cards, personal loans, auto loans and leases and mortgages in 51 economies.

But on the mainland, foreign financial institutes are prohibited from independently issuing any type of bank card or setting up card joint ventures.

GE Money has offered SDB financial consulting services and financial management expertise, but "there is no plan to set up a joint venture between SDB and GE Money", Liu said.

Wal-Mart, which competes with Carrefour and other global retailers for the mainland's market share, runs 66 stores in 34 cities across the country.

Editor: Yan