PSBC Shuts Ubank as Direct Banking Model Retreats in China
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PSBC would absorb PSBC Ubank, a wholly owned subsidiary
Postal Savings Bank of China Co. Ltd. (PSBC) will fold its direct banking arm into its core operations, signaling the decline of a once-hyped fintech model that has rapidly lost relevance on the Chinese mainland.
The state-owned lender said late Tuesday that it would absorb PSBC Ubank, a wholly owned subsidiary. After the merger, Ubank will be dissolved, with all its business, assets and liabilities transferred to PSBC, according to the filing.
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- PSBC will merge its direct banking arm, PSBC Ubank, into its main operations, dissolving Ubank and transferring its assets and liabilities.
- AiBank will become the only remaining standalone direct bank in mainland China, as stricter regulations and rising costs have led others to close or integrate.
- Over 20 direct banks have shut down or merged since 2019; advanced mobile banking apps and tighter regulation have driven this sector shift.
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Who’s Who
- Postal Savings Bank of China Co. Ltd.
- Postal Savings Bank of China Co. Ltd. (PSBC) is a state-owned Chinese lender. It is integrating its direct banking arm, PSBC Ubank, into its core operations, dissolving Ubank. This move aims to optimize resources and reduce operational costs, as PSBC's own digital capabilities have significantly advanced, making its mobile banking app the primary service channel.
- China Citic Bank Corp. Ltd.
- China Citic Bank Corp. Ltd. (中信银行) is a prominent entity in the Chinese banking sector. It is notable for its joint venture with Baidu Inc., AiBank, which is currently the sole remaining standalone direct bank on the Chinese mainland following the trend of direct bank integration.
- Baidu Inc.
- Baidu Inc. is mentioned in the context of AiBank, which is a joint venture between Baidu Inc. and China Citic Bank Corp. Ltd. AiBank is noted as the only remaining standalone direct bank on the Chinese mainland, following a trend of other direct banking arms being absorbed into the core operations of their parent companies.
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What Happened When
- 2019：
- Beginning of a trend where more than 20 Chinese banks have since shut down or integrated direct banking operations into their main mobile banking platforms.
- 2022：
- A major rural bank scandal in Henan exposed risks in online-only accounts, leading to increased regulatory scrutiny over direct banks.
- By 2025：
- Over 20 Chinese banks have shut down or absorbed direct banking arms since 2019.
- As of 2025：
- AiBank remains the only standalone direct bank on the Chinese mainland.
- 2025-09-23：
- Postal Savings Bank of China announced it would absorb its direct banking arm, PSBC Ubank.
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