Jack Ma overtakes $ 30 billion Ant Group IPO against global financial regulations

Alibaba founder Jack Ma flouted international financial regulations, saying China needed to walk its way days before the Ant Group launched the world’s largest public offering.

“The Basel Accords are like an old people’s club. . . We cannot use tomorrow’s methods to regulate the future, ”Mr. Ma said at a conference in Shanghai over the weekend, referring to the international banking banking framework.

Mr. Ma said that the challenges designed to solve the rules were not relevant to China’s development phase. “Many of the world’s problems” stem from simply talking about risk control, talking about development, not thinking about opportunities for young people or developing countries. ”

The financial services group’s dual listings in Hong Kong and Shanghai are expected to raise at least $ 30bn in IPOs, topping the previous record of $ 25.6 billion raised in 2019 in an IPO, a state-owned oil company. Made by Saudi Aramco. .

The Chinese group is controlled by Mr Ma, who has kept a low profile since retiring from his post as chairman of Alibaba in 2019. Ant has been valued at $ 318bn by some analysts and Mr. Ma has pledged to reduce his direct and indirect bets. 8.8 percent.

Ant Alipay is one of China’s two largest mobile payment platforms, as well as hosting fintech services including Sesame Credit Personal Credit Rating System.

There are about 460m people in China without a formal bank credit history. Small and medium-sized enterprises have struggled to obtain loans from the traditional banking sector, which is dominated by large state-owned banks that prefer lending to large companies and state-owned groups.

Mr Ma said the financial system should rely less on big banks and more on the ecosystem of “lakes, ponds, drains and brooks” that channel capital to different corners of the economy.

He also urged banks to take collateral for loans and move away from the “pawn” mentality of banks towards credit-ratings based on big data. The Basel Agreement requires banks internationally to hold sufficient collateral to absorb potential losses.

Ant has expanded its Sesame Credit Scheme to give users free access to everything from shared apartments to umbrella rentals with good scores.

But while Ant’s platform covers a wide range of consumer behaviors that provide useful data, its own experts have questioned the success of Sesame Credit for predicting debt repayment rates. The company is mostly tied to traditional banking data to make lending decisions.

The People’s Bank of China, the central bank, has also run into problems when it is trying to set up its own nationwide alternative credit-scoring company, called Baehang. The largest sources of fintech user data – Tencent and Ant Group – have previously refused to share it with Baehang.

On Sunday, local media reported that Ant Group had purchased an Rmb2.7bn plot of land to build another office building in Hangzhou, the city in which the group is headquartered. The purchase is seen as proof of Ant’s planned expansion, as well as its deep pockets: the company earned Rmb18bn ($ 2.6bn) in profits last year.

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