Fri, Jun 26, 2015 - Page 14 News List

Alibaba launches Internet bank for small enterprises

GOING SMALL:MYbank will target small and medium-sized firms that usually have difficulty obtaining bank loans, the Alibaba Group affiliate said


Alibaba Group Holding Ltd founder Jack Ma speaks during the opening ceremony of MYbank yesterday in Hangzhou, Zhejiang Province, China.

Photo: Aly Song, Reuters

Chinese e-commerce behemoth Alibaba Group Holding Ltd (阿里巴巴) yesterday launched an Internet bank aimed at serving small businesses, which often struggle to obtain credit from large banks.

MYbank, which is 30 percent owned by Alibaba-linked Ant Financial Services Group (螞蟻金服), said in a microblog post it would offer loans of up to 5 million yuan (US$804,450).

The bank, based in the city of Hangzhou where Alibaba is headquartered, added that it would serve “small businesses, individual consumers and rural users.”

Alibaba completed the world’s biggest initial public offering (IPO) in September last year with a listing on the New York Stock Exchange that raked in US$25 billion and made founder Jack Ma (馬雲) one of China’s richest men.

The company’s ambitions extend beyond e-commerce and it has already sought to shake up state banks with a financial product called Yuebao (餘額寶), an investment fund that offers better returns than traditional deposits.

The IPO was priced at US$68 and the shares rocketed to US$120 in November last year. However, they have since been hammered by poor third-quarter results and a row with Chinese authorities who accused Alibaba of allowing imitation goods to be sold on its platform.

Alibaba said last month it would replace its chief executive despite a 45 percent gain in revenue in the first quarter. Profits plunged by nearly half in the period.

Last year, China approved several private banks, including one invested in by Internet giant Tencent Holdings Ltd (騰訊), a key rival of Alibaba.

China previously had only two private banks, Minsheng (民生銀行) and Ping An (平安銀行). Its state-run banks have been seen as reluctant to lend to small and medium-sized enterprises.

Other major shareholders in MYbank include units of privately owned conglomerate Fosun Group (復星國際), with 25 percent, auto parts maker Wanxiang Group (萬向集團) with 18 percent and investment firm Yintai (銀泰) with 16 percent.

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