British digital-only lender OakNorth is looking to expand to one of the biggest markets for financial technology (fintech).
OakNorth, a start-up bank based in London, recorded a pre-tax profit of £10.6 million ($15 million) in 2017 and is considered to be the first U.K. digital-orientated bank to reach such a milestone.
Rishi Khosla, chief executive and co-founder of OakNorth, told CNBC that the firm will eventually grow its reach to China.
“It’s a hyper-competitive market, there’s immense amounts of capital flushing around it,” Khosla said at a fintech conference in London last week.
“It is going to be a market that we will go into. It’s just a question of when and how rather than if.”
China is home to some of the most valuable fintech companies in the world, including established giants like Alibaba-owned Ant Financial, ZhongAn, Qudian and Lufax.
Ant Financial, the most valuable fintech company in the world with a market capitalization of $60 billion, raised an eye-watering $4.5 billion in 2016. That same year, online lender Lufax raised $1.2 billion from investors, in a deal which reportedly lifted its market value to $18.5 billion. Both companies are targeting an initial public offering (IPO) this year.
However, there was a slight decline in venture capital flows into Chinese fintech start-ups last year. The total value of deals fell from $10 billion in 2016 to $2.8 billion in 2017, according to research by consultancy Accenture.
Nevertheless, foreign lenders looking to access the Chinese market could get a boost from the country’s new central bank chief. Yi Gang, who was made governor of the People’s Bank of China earlier this month, said Sunday that the country will open its financial sector up to international firms and give them equal treatment to domestic companies.
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