Hong Kong subprime lender PrimeCredit is resuming its sales efforts with newly launched ZA Bank eying the opportunity for accelerated growth.
PrimeCredit’s Hong Kong and Shenzhen operations are back on sale for at least $600 million, according to an «SCMP» report citing unnamed sources, resuming efforts that were paused in April due to the pandemic.
The sales process is currently being led by majority shareholder China Travel Financial, an arm of the China Tourism Group, though the report added that discussions remain in the early stages with no assurances of an agreement.
Amongst the potential buyers interested are virtual lender ZA Bank and hybrid fund and lending platform Elephant Club.
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PrimeCredit currently has a loan portfolio of about $1 billion as of the start of the year with a customer base of 260,000. As a comparison, ZA Bank – Hong Kong’s first virtual bank to launch – recently announced that it had acquired over 180,000 customers in its first six months, primarily using attractive rates to lure new accounts.
Founded in 1977, PrimeCredit was acquired in 2015 by a consortium that included China Travel Financial, Pepper Australia and York Capital Management for around $600 million, the report added. The deal includes a $760 million carve-out of its residential mortgages to Bank of East Asia, to separate a book of unsecured loans originated in Hong Kong and Shenzhen for acquisition.
