Sichuan-based direct lender XWBank has seen a sharp on-quarter rise in its profits in the third quarter of 2020, as China makes an early recovery from the economic impacts of the COVID-19 pandemic.
XWBank’s third quarter results point to net profits of approximately 140 million yuan during the period, for a rise of 32% compared to the preceding quarter.
The digital bank’s first half net profits were 398 million yuan, comprised of 292 million yuan in the first quarter and 106 million yuan in the second quarter. As of the end of the third quarter XWBank’s net profits in 2020 totalled 538 million yuan.
XWBank saw full year operating revenues of 2.681 billion yuan in 2019, alongside net profits of 1.133 billion.
Analysts say that proposed amendments to China’s commercial banking law will give digital lenders more room to compete against or cooperate with smaller regional lenders, as there will be more restrictions on cross-regional operations.
Municipal banks in particular are expected to shift more towards digitised and online business models, bringing considerable competition to China’s existing online banks.
XWBank was founded in December 2016, and is the first private bank to be established in Sichuan province as well as the seventh in China. XWBank is also the third internet bank to make its debut in China, following on the heels of Tencent’s WeBank and Alibaba’s MyBank.
XWBank’s registered capital is 3 billion yuan, and its founding shareholders include Chengdu Hongqi, New Hope Group (新希望集团) and smartphone giant Xiaomi.