MYbank, a Chinese online lender backed by the Alibaba Group, is seeking to raise about 6 billion yuan (US$871 million) in a fundraising exercise, valuing the firm at 24 billion yuan, according to Reuters.
The bank, in which Alibaba affiliate Ant Financial Services holds substantial stake, plans to use the proceeds to boost its capital base and support lending to small businesses, the news agency said, citing a source and a fundraising document.
MYbank’s capital adequacy ratio was 12.1 percent at the end of 2018 against 13.51 percent a year prior, according to the report.
Several existing shareholders including Ant and Fosun International are looking to participate in the latest fundraising, a source was quoted as saying.
Launched in June 2015, MYbank is one of a handful of Chinese online lenders founded entirely with private investment.
The bank has been seeking to expand its network to include more small businesses under-served by long-established financial institutions.
Funding for such borrowers has traditionally been scarce as they have little to no collateral.
MYbank had served 12.27 million small firms and private business owners, with an average outstanding loan of 26,000 yuan as at the end of last year, its annual report showed.
It recorded net profit of 670 million yuan and revenue of 6.28 billion yuan.
Ahead of the fundraising, MYbank is 30 percent owned by Ant Financial which along with Alibaba has provided the lender with cloud-computing expertise and helped it with big data, artificial intelligence and facial recognition to facilitate lending.
Units of Fosun and auto parts supplier Wanxiang Group own 25 percent and 18 percent respectively, according to the report.
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