|Bid||N/A x N/A|
|Ask||N/A x N/A|
|Day's range||16.09 - 16.32|
|52-week range||12.65 - 17.05|
|Beta (5Y monthly)||0.64|
|PE ratio (TTM)||N/A|
|Forward dividend & yield||0.90 (5.55%)|
|Ex-dividend date||01 Jul 2020|
|1y target est||N/A|
(Bloomberg Opinion) -- The future of Ant Group remains up in the air after its dramatic fall from grace. Regulators seem to have stopped short of dismantling it and the company is considering a transition to a financial holding company, willing to be regulated like a bank. It’ll be tough. What could Ant ultimately look like?Bank-like companies don’t command tech-like valuations. Unless, of course, you’re in the booming consumer finance market in China, which is expected to hit 3 trillion yuan ($464 billion) in volumes over the next four years. That’s where credit demand is —and that’s where Ant’s reach is. More importantly, state planners are trying to generate domestic demand and supply, keeping with their so-called dual circulation strategy. For that to work, credit will have to flow to households effectively.Beijing knows that too. Growing disposable incomes drove consumption growth for the better part of the last decade but have been slowing. That means the authorities need another way to keep its economy humming along. In 2019, consumer finance customer numbers swelled to almost 130 million, up over 50% from the year before. The state also knows that’s good for the economy. Data show an increasing correlation between the growth of consumer loans and retail sales in the country. Ant could potentially play an even larger role here than it is already doing, with more skin in the game.Over the last year, the government has encouraged the growth of consumer finance companies as well as the existing units of banks that deal in the business. Ping An Insurance (Group) Co. of China, one of the largest insurance groups, received approval for a new consumer finance company as did China Construction Bank Corp, one of the largest lenders by assets. The banking regulator also loosened restrictions on these lenders and expanded funding channels by allowing them to raise different types of capital, including tier-2 capital compliant bonds.Ant had hitched itself to the trend. In August last year, it took a 50% stake in a new consumer finance company set up with Nanyang Commercial Bank Ltd., battery maker Contemporary Amperex Technology Co. and others. The banking regulator approved it the following month.To get back in the government’s good graces, Ant could assure the authorities that it will help and not hinder their agenda. For example, the company’s Zhima credit scoring system might dilute worries about banks taking on risky loans and, in the larger scheme, dovetail with the government goal of protecting household wallets.Morphing back into a much more clearly defined financial services player and away from the fuzzy fintech giant operations won’t be too tough for Ant. The hard part is capital commitment. But as a consumer finance company, Ant could raise capital via deposits from its domestic shareholders. It would also be allowed to borrow from banks or issue financial bonds. Many of China’s licensed consumer finance companies have commercial banks as backers. This isn’t likely to return Ant to its super-unicorn valuations. However, a stronger business model that is less reliant on low acquisition costs and tack-on businesses may actually survive alongside Ant’s more established payments business.Consider what’s happened to LendingClub Corp, one of the largest fintech consumer lending platforms in the U.S. The company started out as a marketplace for borrowers and lenders, hoping to upend the banking system. Six years on, it is buying a bank. That provides both cheaper funding for LendingClub and more clarity for regulators, who have approved of the move. The stock has popped since then.From market forces in the U.S. to regulators in China, there seems to be convergence on where large fintech players should sit in financial systems and the purpose they serve.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Anjani Trivedi is a Bloomberg Opinion columnist covering industrial companies in Asia. She previously worked for the Wall Street Journal. For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
A $3 billion bond arranged by a China Construction Bank Corp (CCB) unit using blockchain technology, for listing on a Malaysian cryptocurrency-focused exchange, has been withdrawn at the issuer's request, the exchange said. The bond was to be issued by Longbond Ltd, a special purpose vehicle created solely to issue digital bonds and deposit the proceeds with CCB's branch in Labuan, a Malaysian offshore financial centre. CCB Labuan was lead arranger and listing sponsor of the bond, which was to be tradable on the FUSANG exchange, a Labuan-based trading platform focused on digital assets including cryptocurrency such as Bitcoin.
(Bloomberg Opinion) -- For the first time in three years, JPMorgan Chase & Co. is not the world’s most systemically important bank. The Wall Street giant slipped down a notch in the global assessment of the riskiest lenders — one of the few rankings where banks are eager to see themselves drop. There was good news for Goldman Sachs Group Inc., too, which was also deemed less risky than it was a year ago by the Financial Stability Board.However, any relief that the world’s banking and financial systems have become more resilient would be misplaced. The trillions injected into markets this year by central banks and governments have fanned an explosion of banking activities that’s yet to be captured by the FSB’s risk metrics.JPMorgan will no longer be alone in having to set aside an extra capital buffer of 2.5% to reflect its perceived riskiness. Instead, it will join Citigroup Inc. and HSBC Holdings Plc in the 2% band.Of the 30 banks measured by the FSB, only one — China Construction Bank Corp. — went up a level; it will have to set aside 1.5%. All of the other firms, from Britain’s Barclays Plc to Switzerland’s UBS Group AG, were unchanged in having to provide an extra buffer of 1.5% or 1%. The more capital banks have to put aside, the higher their cost of doing business. No wonder Deutsche Bank AG was flagging its relegation months before it happened last year.There are concerns that the FSB’s metrics are too blunt and too high level to capture the dangers properly, but the bigger problem is that they’re based on data from almost a year ago: December 2019. Since then, banks’ balance sheets — and their riskiness — have been transformed by the huge market dislocations during the pandemic, the surge in corporate borrowing and the record pace of securities sales. Some will have expanded more than others, while the hit from bad loans will take years to work its way through the system.The gross global value of over-the-counter derivatives is one sign of how many riskier assets are now sloshing around the financial system: They rose 24% in the first half of 2020 to $15.5 trillion, according to the Bank for International Settlements. At the same time the value of lenders’ hardest-to-value assets, known as Level 3, surged more than 20% in the first six months of the year, my Bloomberg News colleagues have calculated. At Citi and Societe Generale SA, Level 3 assets rose more than 50%.Elsewhere, the underwriting of stocks and bonds — another activity measured by the BIS — has soared as companies have refinanced loans. Lending, not all of it guaranteed by governments, has swollen some banks’ balance sheets.JPMorgan reported a 20% jump in assets in the first nine months of 2020 compared with the same period last year, as commercial loans and derivative assets rose. Assets at Citi increased 15%; at HSBC they rose by about 9%. A lot has changed since December 2019. The world’s economies, on the other hand, have shrunk dramatically, with no certainty about how long they’ll take to recover from the pandemic lockdowns. Even where risk has moved outside the regulated banking sector, increased links between lenders and non-bank financial companies (which include insurance groups, investment funds and the like) “may lead to larger-scale distress,” the International Monetary Fund warned last month.U.S. regulators are running a fresh round of stress tests on their banks, and the Europeans will follow next year. Those should provide a clearer sense for where the vulnerabilities may lie. It would be dangerous for supervisors to use the FSB’s annual risk assessment to deem banks safer.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Elisa Martinuzzi is a Bloomberg Opinion columnist covering finance. She is a former managing editor for European finance at Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.