Ant Group considers holding company with regulation similar to bank

Jack Ma’s under-seige Ant Group is planning to fold its financial operations into a holding company that could be regulated more like a bank, according to people familiar with the situation, potentially crippling the growth of its most-profitable units.
 
The fintech giant is planning to move any unit that would require a financial license into the holding company, pending regulatory approval, said the people, who asked not be named because the matter is private. The plans are still under discussion and subject to change, the people said. Ant declined to comment.
 
The operations that Ant is looking to fold into the holding company include wealth management services, consumer lending, insurance, payments and MYbank, an online lender in which Ant is the largest shareholder, the people said. Under the financial holding company structure, Ant’s businesses would likely be subject to more capital restrictions, potentially curbing its ability to lend more and expand at the pace of the last few years.

 

 
Chinese regulators on Sunday ordered Ant to devise a plan to overhaul its business, the latest in a series of steps to rein in Ma’s online finance empire. While it stopped short of directly asking for a breakup of the company, the central bank stressed Ant needed to “understand the necessity of overhauling its business” and come up with a timetable as soon as possible. “Its growth would slow a lot,” said Francis Chan, a Bloomberg Intelligence analyst in Hong Kong. The valuation of the non-payment businesses, including wealth management and consumer lending, could be slashed by as much as 75 per cent, he said.
 
Ant was last month poised for a public listing that would have valued it at more than $300 billion, before regulators intervened and scuttled the IPO.