By Julie Zhu
HONG KONG (Reuters) - China's MYbank, an offshoot of Alibaba Group Holding Ltd, seeks to raise about 6 billion yuan (£716.5 million) in its maiden fundraising, valuing the online lender at 24 billion yuan, according to a source and a fundraising document seen by Reuters.
MYbank, backed by Alibaba affiliate Ant Financial Services Group and Chinese conglomerate Fosun International Ltd, plans to use the proceeds to boost its capital base and support lending to small businesses, said the person with direct knowledge of the matter.
Its capital adequacy ratio was 12.1% at the end of 2018 from 13.51% a year prior, its 2018 annual report showed. Chinese regulation dictates small, non-systematically important banks are subject to a minimum capital adequacy ratio of 10.5%.
Several existing shareholders including Ant and Fosun are looking to participate in the latest fundraising, said the person who declined to be identified as the information was not public.
MYbank, Ant and Fosun declined to comment. Bloomberg first reported MYbank's fundraising plans on Monday.
China's internet companies in recent years have increasingly encroached on areas served by traditional banks as the government encourages change in its stodgy and largely state-owned finance industry.
Launched in June 2015, MYbank is one of a handful of online lenders - along with Tencent Holdings Ltd's WeBank - founded entirely with private investment.
MYbank 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.
The bank 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% 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, MYbank president https://reut.rs/2K3nRNJ has told Reuters.
Units of Fosun and auto parts supplier Wanxiang Group own 25% and 18% respectively.
(Reporting by Julie Zhu; Editing by Christopher Cushing)
