P2P lender Lu­fax taps four banks for Hong Kong IPO

China Daily (USA) - - BUSINESS - By REUTERS

Lu­fax, China’s big­gest peer-to-peer lend­ing plat­form backed by Ping An In­sur­ance, is in talks with four in­vest­ment banks about tak­ing lead­ing roles in its planned Hong Kong IPO, peo­ple fa­mil­iar with the mat­ter told Reuters.

The ini­tial pub­lic of­fer­ing could raise $5 bil­lion, Thomson Reuters pub­li­ca­tion IFR re­ported pre­vi­ously.

CITIC Se­cu­ri­ties, Cit­i­group, JPMor­gan andMor­gan Stan­ley have started prepara­tory work, al­though no for­mal man­date has been awarded, the peo­ple said.

The tim­ing and size of the IPO are still un­de­ter­mined, but the four banks are likely to land the key spon­sor roles for the deal, they said, de­clin­ing to be iden­ti­fied as the in­for­ma­tion has not been of­fi­cially dis­closed.

Lu­fax, val­ued at $18.5 bil­lion in a Jan­uary fundrais­ing, would be the first peerto-peer plat­form to list in Hong Kong.

The IPO comes at a time of surg­ing growth in P2P lend­ing and will test in­vestor ap­petite for a new breed of com­pa­nies that threaten to dis­rupt the tra­di­tional fi­nan­cial in­dus­try.

Lu­fax and Ping de­clined to com­ment.

CITIC CLSA, the Hong Kong in­vest­ment bank­ing unit of CITIC Se­cu­ri­ties, Cit­i­group and JPMor­gan also de­clined to com­ment. Mor­gan Stan­ley did not of­fer an

money that Lu­fax likely to raise from IPO in HK

An im­me­di­ate re­sponse.

Peer-to-peer plat­forms help link up in­di­vid­ual or in­sti­tu­tional in­vestors look­ing to in­vest their cash with bor­row­ers in­clud­ing small and medium-sized en­ter­prises, stu­dents and other in­di­vid­u­als that need fund­ing.

Those com­pa­nies are part of a boom­ing fi­nan­cial tech­nol­ogy (fin­tech) in­dus­try in China that hopes to of­fer a young and in­creas­ingly af­flu­ent pop­u­la­tion speedy and easy-to-use ser­vices on their mo­bile phones.

The vol­ume of Chi­nese P2P loans stood at 680.3 bil­lion yuan ($102 bil­lion) at the end of Au­gust, more than 20 times lev­els seen in Jan­uary 2014, ac­cord­ing to in­dus­try data provider Wang­daizhi­jia.

That could swell to 880 bil­lion yuan by the end of 2016 and to 1.5 tril­lion yuan by the end of 2018, ac­cord­ing to es­ti­mates from No­mura.

But P2P lend­ing has also drawn much scru­tiny from reg­u­la­tors.

Seek­ing to head off ris­ing risks in the mar­ket, Chi­nese authorities im­ple­mented ag­gres­sive steps in­clud­ing re­quir­ing bor­row­ing lim­its and the use of third-party banks as cus­to­di­ans of in­vestor funds in P2P plat­forms.

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