Ant Group-backed MYbank introduces three new industrial stakeholders

Adjustments to the shareholding structures of China's private banks have become increasingly common. More private banks are introducing new shareholders with industrial backgrounds and financial strength. Some private lenders have also brought in State-owned capital to quickly replenish funds, strengthen risk resilience and improve corporate governance.

MYbank, an online lender primarily backed by Ant Group, said in its 2025 annual report that it had introduced three new private-sector shareholders through equity transfers in 2025. Following the transaction, Zhejiang Hangcha Holding Co, Zhejiang Hangmin Industry Group Co and Hangzhou Dongheng Petroleum Co hold 4.88 percent, 2 percent and 0.5 percent stakes in MYbank, respectively.

The bank said their participation is expected to further diversify its shareholder structure, improve corporate governance efficiency and bring valuable industrial resources and synergies in areas such as inclusive finance and risk management.

Jiangxi Yumin Bank also underwent a shareholder change on April 21. The 590 million shares held by its second-largest shareholder, Jiangxi Boneng Industrial Group Co, were auctioned by a district court in Nanchang, Jiangxi province. Nanchang Honggutan City Investment Group Co acquired 400 million shares, while Nanchang Water Industry Group Co purchased 190 million shares.

This marked another introduction of State-owned capital into Jiangxi Yumin Bank following the entry of Nanchang Financial Holding Co as the bank's largest shareholder in August 2024. State-owned capital now accounts for 59.5 percent of the bank's total equity.

In addition, Shanghai-based business and financial media outlet Yicai reported that multiple sources confirmed that Jilin Financial Holding Group, a State-owned financial investor under the Jilin provincial government, plans to take control of Jilin Yillion Bank by acquiring shares currently held by Jilin Shengzhuo Investment Co, thus becoming the bank's largest shareholder.

Lou Feipeng, a researcher at Postal Savings Bank of China, said the growing number of State-owned investors taking stakes in private banks is mainly due to financial difficulties faced by some private shareholders, the heavy responsibility borne by local governments in risk resolution and mounting pressure on private lenders to replenish capital. Lou said State-owned participation helps diversify shareholder structures, improve corporate governance and strengthen both capital adequacy and risk resistance.

Dong Ximiao, deputy director of the Shanghai Institution for Finance and Development, said amid rising economic headwinds, local State-owned capital has stronger willingness and capacity than private capital to invest in private banks. Such investments help optimize ownership structures of private banks, stabilize expectations regarding their development, facilitate the integration of regional resources and strengthen synergies between private banks and their shareholders, Dong said.

Private banks are currently experiencing increasing polarization in development. Excluding Wuhan Z-Bank Co, 18 private banks have released their 2025 annual reports so far. WeBank posted operating revenue of 36.28 billion yuan ($5.34 billion) last year, while some smaller banks continued to lag behind.

The divergence in net profit was even more pronounced. WeBank led the sector with a net profit of 11.01 billion yuan, while MYbank posted net profit of 3.29 billion yuan. Together, the two banks contributed nearly 80 percent of total profits among private banks.

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Smaller institutions remained under severe profitability pressure. Analysts said that amid widening industry divergence, State-owned capital is becoming a realistic solution for some private banks seeking to break out of operational difficulties.

Wang Pengbo, chief analyst at consultancy Botong Analysys, said State-owned investment can directly bolster the core capital of private banks, effectively improve capital adequacy ratios, strengthen asset quality and ease long-term capital constraints on business expansion. It can also help improve internal controls and gradually resolve operational and compliance risks accumulated during earlier stages of development.

However, whether these banks can truly turn their business around still depends on their ability to effectively integrate the strengths of State-owned capital while maintaining market-oriented operational mechanisms, thereby achieving a sustainable restructuring of their business models, Wang said.

Contact the writers at jiangxueqing@chinadaily.com.cn