More banks part ways with Ant

Bloomberg and Reuters

Ant Group and at least a dozen banks are paring back their years-long cooperation on consumer lending platforms that fuel the spending of at least 500 million people across China.

Regulators have signaled their intention to curb online loans in recent months, prompting banks and Ant itself to discuss lending caps, people familiar with the matter said, asking not to be identified discussing a private information.

Banks in Zhejiang province have been instructed to cut their exposure to Ant via joint loans on the firm's Jiebei and Huabei platforms, the people said. Some lenders in Shanghai have set a timetable for a gradual reduction in joint offerings, while at least one in Shandong has completely suspended ties with the firm, the people said.

The moves have taken place in parallel with Ant's discussions with Chinese authorities on a restructuring plan. Bloomberg reported on Wednesday that Ant has agreed to become a financial holding company, making it subject to capital requirements similar to those for banks.

Meanwhile, Ant Group plans to spin off its consumer credit data operations, people with knowledge of the matter said - a concession to regulators that should help the Chinese fintech giant get its massive public share sale back on track.

Hiving off the trove of data on more than one billion people is a key part of Ant's business overhaul in response to a regulatory crackdown that resulted in the abrupt suspension of its US$37 billion (HK$288.6 billion) initial public offering, which would have been the world's biggest, the people told Reuters.

The data spinoff, along with Ant's conversion to a more strictly regulated financial holding company, will mean the affiliate of e-commerce behemoth Alibaba (9988) could proceed with the IPO within two years, two other people said.

Ant's restructuring plan could ease founder Jack Ma's regulatory woes.

Separately, SWIFT, the global system for financial messaging and cross-border payments, has set up a joint venture with the Chinese central bank's digital currency research institute and clearing center, a move some see as a sign that China wants to explore global use of its planned digital yuan.

Other shareholders of the Beijing-based venture include China's Cross-border Interbank Payment System and the Payment & Clearing Association of China, both supervised by the People's Bank of China, according to public information.

The new entity, called Finance Gateway Information Services, was established in Beijing on January 16, and its business scope includes information system integration, data processing and technological consultancy, according to the website of the National Enterprise Credit Information Public System.