Ant Group rebuilds for regulators, but at what cost?

FOLLOWING more than a year of restructuring, Ant Group is gradually picking up the pieces and making its way back into Chinese regulators’ good graces. But the fintech company is a stripped-down version of the titan it once was, with its highly lucrative consumer lending business decoupled from ubiquitous payments service Alipay and moved into a consumer finance subsidiary, sending the group’s valuation tumbling from its 2020 peak.

Ant, an affiliate of Alibaba Group Holding, was struck down in November 2020, 2 days before it was to launch a world record-setting US$34.5 billion IPO. Chinese top financial regulators summoned Jack Ma, Ant’s billionaire co-founder and controlling shareholder, and other Ant executives to a rare closed-door meeting before suspending the offering.

The following month, Ant was ordered to carry out an extensive overhaul of its financial business. The company was summoned again in April 2021 to make sure it was “properly addressing the severe problems within its financial business activities and (understood) the seriousness of the rectification work”, according to financial regulators including the People’s Bank of China and the China Banking and Insurance Regulatory Commission (CBIRC).