Alibaba's fintech affiliate Ant gets approval for registered capital expansion

January 5, 2023 3:25 am

Chinese regulators have given Ant Group permission to more than double the registered capital for its consumer finance division, a sign that the company is making big progress in addressing regulatory concerns.

On Friday, the China Banking and Insurance Regulatory Commission said 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, in which Alibaba owns 33%, has been working on reorganizing its business to better comply with regulatory requirements since its massive IPO in 2020 was halted by regulators. As part of the restructuring, the fintech company launched its consumer finance entity, Chongqing Ant Consumer Finance Co, in 2021.

Registered in the southwestern province of Chongqing, the entity houses Ant’s credit businesses Huabei and personal loan business Jiebei. 50% of the consumer finance firm's stake is owned by Ant, and the rest is held by six other shareholders, including Nanyang Commercial Bank, Cathay United Bank, CATL, Beijing Qianfang Technology, China Huarong Asset Management, and Yuwell Group.

Under current registered capital expansion plan, Ant remains the largest shareholder, with 50% of the stake, but the new investor, the state-owned enterprise Hangzhou Financial Investment, has replaced Nanyang Commercial Bank as the second largest shareholder, holding 10% of the shares.

According to Ant’s previous prospectus, Credit Technology contributed 28.59 billion yuan in revenue in the first six months of 2020, accounting for 39.4% of the total.