MYbank deepens push into 'shunned' business

BEIJING • MYbank, the two- year-old Chinese online lender that already has 3.5 million small-business customers, plans to push deeper into a segment that has long been shunned by the country's largest banks.

MYbank wants to capitalise on its links to billionaire Jack Ma's Alibaba Group Holding by offering loans to the more than 10 million smaller merchants that use the company's e-commerce platforms, MYbank president Huang Hao said in a June 29 interview. Ant Financial, Alibaba's financial affiliate, owns 30 per cent of the online lender.

Mr Huang is looking to win "as many as possible" of China's 70 million to 80 million small businesses as customers, most of which have no access to bank loans because they lack collateral.

MYbank was one of the first Chinese lenders - along with Tencent Holdings' WeBank - to be established completely with private investment under a trial programme unveiled in 2014.

"We are in a different stratum from the traditional banks," said Mr Huang, 43, who was previously head of electronic banking at China Construction Bank Corp.

"We are like capillaries reaching every part of society. It could be a small restaurant, a breakfast stand - no other financial institution would have served them before."

Formally known as Zhejiang E-Commerce Bank, MYbank was able to more than quadruple its lending through 2016, taking its outstanding loans to 33 billion yuan (S$6.7 billion).

Interest generated from those loans helped MYbank report a profit of 316 million yuan last year, according to an earnings statement posted on June 28.

Its non-performing loan ratio was around 1 per cent, Mr Huang said, lower than the national average of 1.74 per cent.

While the bank has no immediate plan to boost its buffers, it will consider measures including issuing asset-backed securities to keep capital at an appropriate level, Mr Huang said.

MYbank charges its small- business customers lending rates of between 5 per cent and 14 per cent annually, with many paying 7 per cent to 8 per cent, Mr Huang said.

That level is lower than the rates paid by similar clientele in some Chinese cities.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on July 04, 2017, with the headline 'MYbank deepens push into 'shunned' business'. Print Edition | Subscribe