BEIJING (Reuters) – Ant Group’s consumer finance unit has won approval to begin operating in Chongqing city, the local banking watchdog said on Thursday.
The approval comes nearly two months after Chinese regulators imposed a sweeping restructuring on the Jack Ma’s fintech conglomerate, underscoring a step forward for the revamp of group’s outstanding lucrative consumer loan business.
The unit, Chongqing Ant Consumer Finance Co Ltd, has registered capital of 8 billion yuan ($1.25 billion), according to a statement from the Chongqing bureau of the China Banking and Insurance Regulatory Commission (CBIRC).
Ant made a capital contribution of 4 billion yuan for a 50% stake, while Hong Kong-based Nanyang Commercial Bank holds a 15% stake while Taiwan’s Cathay United Bank holds 10%, it said.
Other co-founders include battery maker CATL and Alibaba-backed intelligent transport services firm China TransInfo Technology, and China Huarong Asset Management Co.
“Under the guidance of regulators, Ant will work with other shareholders … to serve the needs of consumers, and to continue enhancing the quality of financial services and risk management capabilities,” Ant said in a statement to Reuters on Thursday.
In April, Chinese regulators asked Ant to conduct a sweeping business overhaul, include turning Ant itself into a financial holding firm, and fold its two lucrative micro-loan businesses Jiebei and Huabei, into the new consumer finance firm.
“Ant must complete the branding restructuring of Huabei and Jiebei within 6 months after its consumer finance firm starts to operate,” the Chinese business newspaper 21st Century Business Herald reported on Thursday, citing a regulator at the CBIRC.
“The two micro loan entities of Ant should exit from the market in an orderly manner after the business restructuring,” it added.
The unit would need to further bolster its capital base as Ant prepares to fold in its lucrative micro-lending businesses to meet regulatory requirements on capital adequacy, Reuters reported in February.
($1 = 6.3912 Chinese yuan renminbi)
(Reporting by Cheng Leng and Ryan Woo; editing by Jason Neely and David Evans)