Ant gets approval to expand its consumer finance business

BEIJING — Ant Group’s consumer finance unit has acquired approval to greater than double its registered capital, an indication of progress in resolving regulators’ issues.

For the reason that abrupt suspension of its huge IPO in late 2020, Ant has been working with Chinese language regulators to restructure its business. Alibaba owns 33% of Ant, which operates one in all China’s two dominant cellular pay apps.

Alibaba’s Hong Kong-traded shares traded 8% greater Wednesday. Shares listed in New York closed 4.4% greater in a single day.

Ant launched its consumer finance firm in 2021 as a part of the restructuring.

On Friday, the China Banking and Insurance coverage Regulatory Fee stated it approved Ant’s request to increase the amount of registered capital for the consumer unit, to 18.5 billion yuan from 8 billion yuan.

Ant will nonetheless maintain a 50% stake within the consumer finance firm, in accordance to the announcement. New buyers within the different half of the corporate embody an entity backed by the Hangzhou authorities and Sunny Optical Know-how.

“This is a positive start of the steps that Ant Financial needs to go through [with] its restructuring process under the supervision of the CBIRC and PBOC,” stated Winston Ma, adjunct professor of regulation at New York College.

It stays unclear what the timeline is, if any, for a revival of IPO plans. Ant has but to obtain a monetary holding firm license from the Folks’s Financial institution of China. The corporate didn’t instantly reply to a CNBC request for remark.

The consumer unit homes Ant’s credit score companies Huabei and Jiebei. So-called credit score tech had contributed 28.59 billion yuan, or 39.4%, to Ant’s income within the first six months of 2020, in accordance to a prospectus.

China’s banking regulator stated the corporate had six months to full the modifications earlier than the capital growth approval grew to become invalid.

Chinese language media beforehand reported information of the approval, whose phrases had been beforehand launched publicly.

— CNBC’s Arjun Kharpal contributed to this report.

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