Ant Group, supported by Alibaba Group Holding Ltd (NYSE: BABA), has obtained key approval from the China Banking and Insurance Regulatory Commission to operate a consumer credit company, according to reported on CNBC on Thursday.
What has happened
Ant will own a 50% stake and contribute some $ 625.93 million to the new company, while a consortium of six shareholders will own the remaining stake, according to information provided.
The consumer finance branch will offer personal loans and issue bonds, among other things. The unit will also house the revenue-driving credit businesses of Ant, Huabei and Jiebei.
Because it is important
This approval is seen by some analysts as the first important step for Ant Group to resolve its regulatory problems after the intense regulatory scrutiny in which it has been immersed.
Last year, Ant Group’s billionaire founder Jack Ma publicly criticized China’s banking sector for operating with a “pawnshop mentality.” Soon after, the company’s plans to celebrate an IPO of Ant Group.
Last December, the People’s Bank of China ordered Ant Group to draw up a rectification plan that included becoming a financial holding company, whereby the company could regulate itself more like a bank.
The movement of prices
On Thursday, Alibaba shares closed 1.16% lower at $ 217.05.
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