Ant consumer finance arm to raise 4.5 billion yuan for growth

ANT Group’s consumer finance affiliate is raising 4.5 billion yuan (S$844 million) from investors to revive growth after regulators wrapped up a multi-year crackdown on the Jack Ma-backed financial technology giant.

Ant Group will contribute 2.25 billion yuan to the plan while other investors include Sunny Optical Technology Group and Transfar Zhilian, according to exchange filings on Thursday (Sep 28). Chongqing Ant Consumer Finance registered capital will increase to 23 billion yuan, pending regulatory approval.

Authorities ended an almost three-year long probe into the fintech giant by imposing a nearly US$1 billion fine in July. Ma’s run-in with Beijing has cost his empire – including Ant and Alibaba Group Holding – billions of US dollars in lost valuation, including what would have been the largest initial public offering in history.

Chongqing Ant combines the group’s most lucrative online lending operations, called Huabei (Just Spend) and Jiebei (Just Lend). The division has been crucial in driving growth at Ant’s digital finance business, which contributed 63 per cent of the firm’s revenue in the first half of 2020 before the authorities unleashed a barrage of rules.

Ant will continue to hold 50 per cent of the consumer finance company. It will have an estimated lending capacity of as much as 620 billion yuan, according to Bloomberg calculations.

The fintech company has been trying to beef up its development in AI and its large language model and create new pockets of growth. Ant’s profit the quarter ended in March rose 17 per cent, the first signs of improvement after the yearslong regulatory crackdown. BLOOMBERG