Private Lender CITIC aiBank Grabs Approval for Investment from Canadian Pension Fund

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Baidu-backed private digital lender CITIC aiBank (百信银行) has just obtained approval for an increase in its registered capital from China’s top banking authority.

The China Banking and Insurance Regulatory Commission (CBIRC) recently issued the “Approval for CITIC aiBank’s Capital Increase and Share Expansion Plan and Related Shareholder Qualifications” (关于中信百信银行增资扩股方案及有关股东资格的批复).

According to the Approval aiBank will issue up to 1.634 billion shares under the capital expansion plan.

China CITIC Bank will subscribe for 622 million shares, to bring its total shares to 3.422 billion, or 60.75% of equity.

The Canada Pension Plan Investment Co., Ltd will subscribe for 466 million shares, bringing its stake in aiBank to 8.27%, while Baidu is also expected to participate in the share increase.

CITIC aiBank’s registered capital is set to rise to 5.634 billion yuan following the share increase, from 2 billion yuan at the time of its founding.

In June 2018 CBIRC gives its approval to a 2 billion yuan share increase which brought aiBank’s registered capital to 4 billion yuan.

Chen Wen (陈文), vice-chair of the Digital Economy Research Centre at the Southwestern University of Finance and Economics, said to Securities Daily that aiBank’s acceptance of capital from a foreign investor is a major step in the development of private banks in China.

The All-China Fed­er­a­tion of In­dus­try and Com­merce (ACFIC) recently submitted a bill to China’s Two Sessions congressional meetings calling for the loosening of a range of restrictions on private banks operating in China, including allowing them to accept capital from foreign investors.

Chi­nese au­thor­i­ties have given their ap­proval to the es­tab­lish­ment of 19 pri­vate banks, of which 18 have al­ready com­menced op­er­a­tion. 

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