Ant Group planning revamp amid regulator pressure: report

Beijing

CHINA'S Ant Group Co Ltd is planning to refashion itself as a financial holding company under the supervision of China's central bank in the face of regulatory pressure, the Wall Street Journal reported on Wednesday.

The fintech affiliate of Alibaba Group Holding Ltd has submitted an outline of a restructuring plan, which could be finalised before China goes into the week-long Chinese New Year holiday in mid-February, the Wall Street Journal said, citing sources.

Chinese regulators had asked Ant to consider folding up most of its financial businesses into a holding company that would be subject to more stringent capital requirements, two sources told Reuters in December.

The country's central bank, People's Bank of China, has said Ant controls a range of financial institutions, including securities and insurance firms, and should set up a holding firm according to law.

Chinese regulators in November abruptly halted Ant's US$37 billion initial public offering in Shanghai and Hong Kong, which was set to be the world's largest.

Ant and Alibaba were not immediately available for a comment.

China's banking and insurance regulator on Wednesday said it would strengthen supervision over financial activities by banks and insurers with Internet platforms, the latest attempt to rein in China's financial technology sector.

Government watchdogs have tightened scrutiny over China's tech giants in recent months, drafting anti-monopoly rules and guidelines seeking to limit collection of personal data by mobile apps, including those used to make payments.

"It is necessary to effectively strengthen the supervision of financial activities on Internet platforms," the China Banking and Insurance Regulatory Commission (CBIRC) said in a statement issued after an annual meeting.

The regulator has already warned consumers to guard against borrowing spurred by Internet finance platforms that hide the real costs of such debt.

The CBIRC this month banned commercial banks from using third-party Internet platforms to sell deposit products, including those relating to fixed-term deposits.

On Wednesday, it said there needed to be tighter scrutiny of the development of "financial cooperation activities" between banks and insurers, on the one hand, and Internet platforms on the other.

The CBIRC said that similar businesses and entities should be treated equally, vowing to stamp out"monopolistic and anti-competitive behaviour" and prevent"disorderly expansion" in the financial sector.

The CBIRC also said it would push large banks to provide risk management tools and models to smaller banks, and to work to eliminate financial risks and keep China's macro leverage ratio stable.

China's banking industry disposed of 3.02 trillion yuan (S$619 billion) of non-performing assets in 2020, the regulator said. The total amount of non-performing loans disposed of in the period 2017-20 exceeded the amount for the previous 12 years combined, it said. REUTERS