Jack Mae laid siege Ant Group Co. is planning to fold its financial operations into a holding company, which, according to people familiar with the situation, could regulate its bank more like a single bank while developing more profitable units.
Fintech Giant plans to move any unit that needs a financial license from the holding company, pending regulatory approval, people said, adding that the matter was private and asked not to be named. Plans are still under discussion and subject to change, people said. The ant declined to comment.
People wanting to join the ant holding company include asset management services, consumer financing, insurance, payments and MyBank, which is the online lender in which Ant is the largest shareholder, people said. Under the financial holding company constitution, Anta’s businesses may be subject to more capital restrictions, potentially hindering its ability to further lend and expand at the pace of the past few years.
He said the proposals suggest Ant could run financial services beyond its payment business, while investors’ worries about how to interpret the central bank’s Sunday message were allayed when it asked Ant to return to its origins as a payment provider.
“This means that China is still trying to promote domestic consumption, and they need an ant-like platform to help with consumer loans,” said Wang Zhen, a Shanghai-based analyst at UOB-K Hyun Holdings Ltd. Consumer lending should not be overused. “
Softbank Group Corp … %% rose, the highest in more than two weeks. Alibaba Group Holding Ltd. in Hong Kong rose 5 .. %%, Nov. Since. The Japanese company is the largest shareholder in Alibaba, a major supporter of ants.
Chinese regulators have asked Anton to re-examine his business, which is the latest in a series of measures to curb the online financial empire. While it did not directly ask for the company’s collapse, the central bank stressed the need to “understand the need to control its business” on the ant and to come forward with a timetable as soon as possible.
“Its growth will be much slower,” said Francis Chen, a Hong Kong-based Bloomberg Intelligence analyst. The valuation of non-payment businesses, including asset management and consumer financing, can be reduced by as much as 75%. Said.
Last month Ant prepared for a public listing worth more than 300 300 billion, before regulators intervened in the IPO and curbed it.
According to its IPO filing, Ant had અને 11 billion in cash and equivalent as of June. The company said in its prospectus in October that it would use its subsidiary Zhejiang Finance Credit Network Technology Co. Apply for a financial holding license.
Under the rules, which went into effect in November, non-financial companies that control at least two cross-sector financial institutions are required to have a financial holding license. Rules on how to control financial holding companies are still under discussion.
| Key changes under draft rules | Impact on firms |
|---|---|
| Lending companies like Ant will need to be provided 30% funding for the loan | Need more capital; The ant has about 2% loan on its books |
| Companies will be banned from operating outside the provincial base without special permission from the banking watchdog. Permission, if granted, is renewed every three years | Some payments are required to re-apply for a license; More frequent checking |
| Lenders in multiple provinces have a Minimum registered capital of 5 billion yuan | The more capital, the more testing on operations |
| The shareholder cannot control more than one nationally operated micro-lender | Limited expansion vehicles |
Chan estimates that Ant needs at least 70 billion yuan (11 11 billion) in new capital for its financing business alone. The calculation is based on draft rules that require Ant to co-fund a loan of 0%, with a maximum asset leverage of five times.
Lifestyle units
An ant is planning to leave its digital lifestyle business – services that connect users to food delivery, on-demand neighborhood services and hotel bookings – from an economic holding company, people said. The person added that ants would still be the parents of all those operations.
Although Ant is not working on a proposal to break up the company at this time, more guidance is being sought from regulators on which structure is acceptable and it may change its plans based on the response, the person said.
| Recent rule changes |
|---|
| Businesses will work in two financial areas, classifying the wealth threshold.Financial holding companies with more scrutiny on capital, funds, ownership, etc. |
| Use of asset-backed securities to fund terminated consumer loansFour times the net asset value; The net assets of loan companies using funds by banks and shareholders should not exceed the value |
| Regulators saidCharge cap interest rate on consumer loans |
According to Chant, the ant’s valuation could fall below 153 billion, the same as it was two years ago after a round of fund-raising.
– Assisted by Lulu Yilun Chen, Zheng Li and Jun Luo
(Updates with Softbank and Alibaba share prices are in the sixth paragraph)
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