Jack Ma’s Ant Group Co. and other Chinese fintech giants have taken another blow with new rules that target one area of ​​lucrative growth – joint lending with banks.

Banks must cap global co-lending with internet platforms or other partners at no more than 50% of outstanding loans, the China Banking and Insurance Regulatory Commission said on Saturday. The co-loan with a platform should not exceed 25% of the level 1 net capital of the bank.

The restrictions come on top of draft rules for online lenders released late last year, which heralded a sudden loss of appetite for free-wheeling fintech innovations among regulators. The derailment of Ant’s $ 35 billion stock sale and scrutiny of its operations has since shaken one of China’s biggest business success stories. Authorities have also cracked down on tech behemoths in everything from e-commerce to credit scoring and payments.

“The new rules mainly target large technologies that rely more on the co-lending business model,” Citigroup analysts led by Judy Zhang wrote in a note. They “can prevent banks from relying too much on online lenders for credit scoring and focusing too much on selective fintech partners.”

From January 1, 2022, an internet platform will need to provide at least 30% of the funding itself in any single joint loan with a bank, the CBIRC said.

The settlement is expected to further cripple the growth of Ant, whose Jiebei and Huabei units had facilitated 1.7 trillion yuan ($ 263 billion) in consumer loans to 500 million people as of June 30, of which only about 2 percent were kept in the balance sheet of the parent company. Concerns over the need to raise capital to fill the gap and seek domestic licenses have prompted analysts at Morningstar Inc. and other companies to cut Ant valuation estimates in half, from $ 280 billion dollars before it was removed from listing.

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