Jack Ma’s Ant Group was given the go-ahead to start operations at its consumer finance company — Chongqing Ant Consumer Finance Co. — after being forced to restructure its business after its record-breaking dual public listing was halted last year by Chinese regulators.
The newly licensed arm is the nucleus of Ant’s restructured lending business, according to a notice from the China Banking and Insurance Regulatory Commission (CBIRC) on Thursday (June 3). Chongqing Ant Consumer Finance can issue consumer loans, borrow from banks and issue bonds.
Aside from lending and consumer finance products, Chongqing Ant’s yuan-denominated business also can engage in insurance product sales and advisory services, and can invest in fixed income and other businesses approved by CBIRC, the statement said.
Ant’s new entity is licensed for consumer lending and other financial operations and will contain Ant credit services Huabei and Jiebei, currently used by almost 500 million people in China, The Wall Street Journal and other news outlets reported.
Ant Group, controlled by Ma, will hold a 50 percent stake in the new entity and invested $625 million in registered capital. The balance of the firm will be held by six other shareholders, including two state-owned financial institutions — Nanyang Commercial Bank and China Huarong Asset Management Co.
“Under the guidance of regulators, Ant will work with other shareholders of Chongqing Ant Consumer Finance to serve the needs of consumers, and to continue enhancing the quality of financial services and risk management capabilities,” Ant said on Thursday, as reported by the South China Morning Post.
Chinese regulators reached an agreement in February with Jack Ma and Ant Group to create a financial holding company, operating under rules similar to banks. The decision followed the scrapped $34 billion initial public offering (IPO), which then valued Ant at an estimated $316 billion. The new regulatory mandates also require 30 billion yuan (approximately $4.6 billion).
Increased scrutiny by Chinese regulators after the unsuccessful IPO led to Simon Hu stepping down as CEO of Ant Group in March. Hu was CEO since 2019 and was replaced by company veteran Eric Jing, who is also staying in his current role as executive chairman.