Open sesame: Alibaba empire breaks into financial services

Jack Ma

Hot on the heels of its “blockbuster” IPO listing on Wall Street earlier this month, the world’s biggest e-commerce group has now secured a Chinese private banking licence for its financial affiliate.

By awarding the licence, the China Banking Regulatory Commission (CBRC) has paved the way for the Alibaba-controlled Zhejiang Ant Small & Micro Financial Services Group Co. to open Zheijian MYbank, a private bank in Hangzhou. The company already owns Alipay, a changer to PayPal, as well as the money-market fund Yu’E Bao.

In March, CBRC announced plans to support the creation of five privately owned banks that will focus on providing credit to smaller businesses. Lender Zheijian MYbank, which has been approved as part of this trial scheme, will be 30% owned by Zhejiang Ant, with a Fosun Group subsidiary taking a 25% stake and two further shareholders taking 16% and 18% stakes respectively.

Since creating Alibaba in his tiny flat in Hangzhou in 1999, founder Jack Ma has transformed a website that aimed to help small Chinese merchants to sell goods abroad into a $231 billion powerhouse. The company is already bigger than Amazon and eBay combined, accounting for four-fifths of all e-commerce in China.

Last year, after attempts to list the company on the Hong Kong stock market were shot down by regulators, the company sought an IPO in the US instead. Finally released this month and priced at $25 billion, this has become the biggest initial public offering in history.