Tencent's WeBank looking to raise $1 billion in funding round - source

HONG KONG (Reuters) - WeBank, the online finance arm of Chinese tech firm Tencent Holdings Ltd , is looking to raise about $1 billion to expand its lending business and other financial services, a person with knowledge of the matter said on Wednesday.

WeBank, launched in January, plans to hold discussions primarily with private equity investors over the next couple of months, said the person, who declined to be identified as the matter has not been announced.

WeBank did not reply to a Reuters request for comment on the fundraising, which was previously reported by the Wall Street Journal. Tencent declined to comment.

Internet firms such as Tencent and e-commerce rival Alibaba Group Holding Ltd (BABA.N) have targeted mostly retail clients in their online banking efforts. But they are unable to provide some services for which regulators require physical premises.

Internet search provider Baidu Inc (BIDU.O) is also venturing into the sector, saying on Wednesday it will set up a direct bank in partnership with China CITIC Bank Corp Ltd .

(Reporting by Elzio Barreto; Additional reporting by Engen Tham in SHANGHAI and Paul Carsten in BEIJING; Editing by Denny Thomas and Christopher Cushing)