China has dictated the rules to Alibaba to build its fintech

A new financial operator aimed at consumers is born from the forced restructuring of the Ant group. Here are the stakes set by Beijing after the sudden stop to listing

Ant Group (photo Ant) The forced restructuring process of Ant Group reaches a turning point: fintech, 33% owned by Alibaba and controlled by billionaire Jack Ma has received approval from Chinese authorities to run a consumer finance company. Ant Group will be able to hold a 50% stake on the eight billion yuan of total capital in the new entity (approximately $ 1.25 billion in total). And six more shareholders will bring the remaining half of the resources, as indicated by the Chinese Banking and Insurance Commission. Chongqing Ant Consumer Finance company will be registered in Chongqing city and will have to meet certain operating conditions.

Ant Group is experiencing regulatory problems after Beijing's sudden stop at November's record-breaking price of 34.5 billions of dollars. One of the directives from the People's Bank of China implied that it was regulated more like a bank than a technology operator. In short, to respect precisely those rules that Jack Ma considered "antiquated", and belonging to a "pawnbroker mentality". Sand in the eyes for the Chinese authorities who, worried by the growing role of big techs in providing monetary services capable of impacting financial stability (Ant Group's Alipay payments app has 730 million active users per day), has seized the an opportunity to also harness Alibaba, with an antitrust fine of 2.8 billion dollars.

Now the new operator will be able to issue personal loans and bonds. It will also host the credit activities provided by Huabei and Jiebei, hitherto essential for the company's revenues as a vehicle for offering products, independently subscribed by the institutional financial partners of the Ant group, a hundred banks. Until a year ago, this part of the business was worth 39% of Ant's revenues, but now it will have to clearly indicate which bank will actually supply the product. In addition, any loan provided through Huabei and Jiebei that will have to be partially underwritten by Ant. According to previous assessments, the new company will have to have enough money to guarantee at least 11.5% of the risk-weighted assets in the case of loans and contribute to at least 30% of the loans disbursed in agreement with the banks. >

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Topics

Alibaba China Finance Fintech globalData.fldTopic = "Alibaba, China, Finance , Fintech "

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