Banking regulator OKs Xiaomi-backed private lender in SW China

A new private lender backed by eight Chinese firms including smartphone maker Xiaomi has been approved by China's banking regulator, the smartphone maker confirmed Monday.

The bank, to be headquartered in Chengdu, capital of southwest China's Sichuan Province, has a registered capital of 3 billion yuan (around 456 million U.S. dollars), and counts New Hope Group, a Xiaomi subsidiary called Yinmi, and Sichuan-based convenience store operator Hongqi as its biggest stakeholders, with 30, 29.5 and 15 percent stakes in the bank.

The new lender is evidence of further inroads by Chinese Internet firms into the country's state-dominated financial sector. The country's banking regulator has sought to extend financial services to a broader range of companies and individuals that are previously under-served by the country's established, state-backed lenders.

The bank will extend financial services to young people and small companies, according to a press release by Xiaomi. Chinese Internet giants Tencent and Alibaba have also launched their own lender WeBank and MYbank, respectively, last year, offering online-based financial services such as wealth management products and loans.

Xiaomi has sought to extend mobile financial services to compete with domestic and global rivals like Huawei, Samsung and Apple as China's smartphone sales moderate. Both Apple and Samsung have brought their mobile payment services to China. Xiaomi has also launched a financial services app offering wealth management products.

New Hope Group chairman Liu Yonghao was among a group of Chinese entrepreneurs that established the country's first private lender China Minsheng Bank in the 1990s. New Hope Group's financial holdings also includes insurance company Minsheng Life, and securities firm Huachuang Securities. Endi