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Alibaba Group Holding Ltd (BABA) Affiliate Is Approaching $95B In Consumer Lending

BABA – Ant Financial has made substantial headway in China’s consumer loans market.

Alibaba Group Holding Ltd (NYSE:BABA) affiliate Ant Financial has become a major player in the Chines consumer loans market. In fact, the unit now has more outstanding consumer loans than China’s second-largest bank. 

Bloomberg has the details on the surging growth for the Alibaba affiliate.

Ant Financial’s consumer lending has reached at least 600 billion yuan ($95 billion) despite the affiliate of Alibaba Group Holding Ltd. facing a tougher environment for securitizing its loans, people familiar with the matter said.

From the start of 2017 until this month, Ant’s consumer lending has doubled via its Huabei and Jiebei units even as the government reduces quotas for new asset-backed securities that can underpin such loans, one of the people said, asking not to be named as the matter is private. The loans can incur annual interest rates as high as 15 percent, although they are normally less than that, another person said.

Ant Financial is controlled by Alibaba chairman Jack Ma, and reports indicate that the unit may be headed for an IPO of its own. The business was formerly known as Zhejiang Ant Small & Micro Financial Services Group. and it was spun out from Alibaba back in 2011.

Since the beginning of last year, Ant’s Huabei and Jiebei units have managed to double consumer lending for the company as a whole.

Alibaba Group Holding Ltd shares rose $0.56 (+0.29%) in premarket trading Tuesday. Year-to-date, BABA has gained 12.18%, versus a 4.80% rise in the benchmark S&P 500 index during the same period.

BABA currently has a POWR Rating of B (Buy), and is ranked #13 of 82 stocks in the China category.

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