Alibaba chairman's financing firm granted to set up private bank

People walk at the headquarters of Alibaba in Hangzhou, Zhejiang province, April 23, 2014. [Photo/Agencies]

BEIJING - China's banking regulator gave the go-ahead on the setup of two more private banks on Monday, including MYbank which will be mainly funded by a micro-business financing company owned by Alibaba Chairman Jack Ma and his colleagues.

MYbank will be located in Hangzhou, capital of East China's Zhejiang province, and the other private bank will be based in neighboring Shanghai, the China Banking Regulatory Commission (CBRC) said in two separate statements.

The CBRC requires them to be established within 6 months from Monday.

The approval of the private banks marks the Chinese government's latest efforts to deepen financial reform and support the country's small and micro-businesses.

Setting up private banks was written into a historic reform plan rolled out last November after a key plenum of the Communist Party of China Central Committee, in which the Party promised to further open up the banking sector.

Five private banks

According to the CBRC statement, a 30 percent stake of MYbank will be funded by Zhejiang Ant Small and Micro Financial Services Company, which is owned by Alibaba Chairman Jack Ma and his colleagues.

The Shanghai-based conglomerate Fosun Group will contribute 25 percent of funding, and China's largest auto parts supplier, Wanxiang Group, will hold an 18 percent stake in MYbank.

The new Shanghai-based private bank doesn't have an official English name yet, but its Chinese name is Huarui.

It will have 30 percent funding from Juneyao Group, another Shanghai-based conglomerate, and 15 percent of its funding will come from Metersbonwe Group, a leading casual wear company in China.

Currently, China has only one private bank in service, China Minsheng Bank, which was founded in 1996 in Beijing. Listed in both Shanghai and Hong Kong, Minsheng is the country's first national bank founded by private capital.

The CBRC said in March this year that China will set up five private banks on a trial basis. Each of the banks will be co-sponsored by at least two private capital providers.

On July 25, the CBRC green-lighted the establishment of three private banks, including the Shenzhen-based Webank, funded by another Chinese Internet giant, Tencent.

The other two are located in Wenzhou, a vibrant private-sector hub in Zhejiang, and the northern municipality of Tianjin.

Targeting small businesses

Yu Shengfa, deputy CEO of Zhejiang Ant who is in charge of setting up the private bank, said MYbank will be an Internet-based commercial bank, using Internet technologies to provide online financial services for small- and micro-sized firms and individual consumers at e-commerce platforms.

MYbank is designed to focus on small banking businesses, with a sum of deposit no more than 200,000 yuan ($32,520) and a loan worth no more than 5 million yuan, he told Xinhua.

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