Xiaomi-backed online bank to launch services

A CHINESE online bank backed by smartphones and home appliances maker Xiaomi Inc is set to launch services soon, after being officially established and rebranded recently, according to one of the venture’s investors. New Hope Group Co Ltd said in a statement last week shareholders and regulators had approved the name Sichuan XW Bank for the lender.

“This is an important step in the process, marking (the bank’s) the official establishment,” said the statement, citing an unnamed person in charge at the new bank. “(The bank) will be officially open to users in the near future.” It is the latest in a string of new online banks backed by Chinese tech companies, who are hoping to tap the country’s underserved market of small enterprises and consumers.

WeBank, backed by Tencent Holdings Ltd, became China’s first operational online-only bank in 2015, followed by MYBank, a venture controlled by Alibaba Group Holding Ltd affiliate Ant Financial Services Group.

The new venture comes as Xiaomi has seen its smartphone sales shrink, raising doubts about the worth of the company, which was valued at $46 billion in its last fund-raising in 2014. It is now pinning profit growth hopes on sales from smart home devices as well as revenue from its software eco-system. On Tuesday, Xiaomi CEO and Chairman Lei Jun revealed the rebranding with a picture of the new bank’s logo posted on Twitter-like social media site Weibo.

A Xiaomi spokeswoman confirmed the company’s official English name but declined to comment on a potential launch date.

China’s traditional banks are overwhelmingly state-owned and largely serve state enterprises, making financing difficult for small private enterprises. The government has sought to remedy the issue by releasing batches of private banking licenses, beginning in 2014. The latest batch, released on Wednesday by the China Banking Regulatory Commission, includes new banks in China’s northeast industrial rust belt. Sichuan XW Bank, originally approved by banking regulators in June under the provisional name Sichuan Hope Bank, is a joint venture of several investors including Xiaomi subsidiary Sichuan Yinmi Technology Co Ltd, New Hope Group and Chengdu Hongqi Chain Co Ltd.