Jack Ma's Ant ekes out profit rise as fintech overhaul advances

The company contributed 7.28 billion yuan to Alibaba Group Holding's earnings. PHOTO: REUTERS

HONG KONG (BLOOMBERG) - Billionaire Jack Ma's Ant Group saw profit inch up in the three months to December, despite setbacks from regulatory overhauls taming the country's fintech industry.

The company contributed 7.28 billion yuan (S$1.5 billion) to Alibaba Group Holding's earnings, a filing showed on Thursday (May 26). Based on Alibaba's one-third stake in Ant, that translates to an estimated 22.05 billion yuan in profit for Ant's December quarter, or a 1.3 per cent increase from a year earlier. Ant's earnings lag a quarter behind Alibaba's.

Ant in March declared a dividend of about 3.9 billion yuan to its backers. But shareholders - including scores of employees - of two entities that held 50.52 per cent of Ant pledged to keep the dividend within the firms to "better support the company as it moves forward with its business rectification and facilitate its long-term sustainable development", a company spokesman said in an e-mailed response.

Mr Ma controls voting rights in Ant.

China kicked off a campaign to rein in its tech giants after snuffing out Ant's US$35 billion (S$48 billion) initial public offering in late 2020. The crackdown has snowballed into an assault on every corner of China's technosphere as Beijing seeks to end the domination of a few heavyweights and create a more equitable distribution of wealth.

As part of the government-ordered restructuring, Ant has ramped up its capital base to 35 billion yuan. It is also building firewalls in an ecosystem that once allowed it to direct traffic from Alipay, with a billion users, to services like wealth management, consumer lending and delivery.

Consumer loans jointly made with banks have been split from Ant's Jiebei and Huabei brands. Assets under management at its money market fund Yu'ebao - once the world's largest - dropped 15 per cent from a year earlier to 825 billion yuan as at March.

Alibaba reported a better-than-expected 9 per cent rise in revenue after Chinese consumers turned to online malls for basic needs during Covid-19 lockdowns across the country. The company refrained from offering a projection for annual revenue, citing uncertainty arising from Covid-19 curbs.

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