The decision was made by Jack Ma just hours before SoftBank reported the highest losses in its history.
It was on Monday that SoftBank announced that Jack Ma will leave the top of its administration. The decision came at a time when the Chinese Billionaire begins to focus his attention on philanthropy. In September; Jack Ma had abandoned the command of Alibaba.
But it is also the latest departure from senior executives who supported management led by CEO Masayoshi Son, taking place at a, particularly troubled time for SoftBank.
A few hours after the departure of Jack Ma, who spent a decade in its administration, the Japanese technology group announced record losses and the highest ever suffered by a Japanese company.
It recorded operating losses of around $12.7 billion in the fiscal year ended in March. This is the first annual loss in 15 years, compared to a profit of around $18.14 billion recorded in the same period.
The losses were dictated by the investment in WeWork and other technology-related companies that were severely affected by the coronavirus pandemic.
SoftBank Group loses $8 billion at the end of its fiscal year due to the collapse of its investments.
Jack Ma, Co-Founder Of Alibaba, To Leave Softbank Group Board After 13 Years
The Japanese conglomerate SoftBank Group recorded losses of $12.7 billion at the end of its 2019 fiscal year, closed on March 31, due to the collapse of the value of several of the investments.
Also, SoftBank Group estimated the losses recorded concerning its investment in WeWork at $6 billion, including provisions for credit commitments and financial guarantees for the loss of contracts.
For its part, the income of the Japanese group between April 2019 and March 2020 totaled $53 million, 1.5% above the company’s turnover in the previous year.
On the other hand, SoftBank Group has announced its intention to carry out during the current fiscal year a program to repurchase its shares of up to $4, with which it will acquire around 135 million titles from the company, representing 6.7% of the capital.
This program is part of the Japanese company’s plan to reduce the company’s assets by $38 billion to reduce its debt and increase its liquidity reserves.
Jack Ma Leaves The Board 13 Years Later
At the same time as it announced annual accounts, SoftBank Group has reported that Jack Ma will leave the company’s board of directors, which he has been a member of since 2007.
Masayoshi Son, CEO of SoftBank, was one of the first investors to bet on Alibaba in 2000, of which the Japanese conglomerate controls around 25%.
In its statement, SoftBank Group does not offer details about the departure of Jack Ma, which will be official on June 25. Moreover, the Chinese businessman already decided to leave his position on the Alibaba board last year to focus on philanthropic projects.
Jack Ma: Chinese Billionaire’s Startup Grows Stronger During The Quarantine
Ant Financial Services Group increased its participation in the Chinese banking sector after the closure of branches due to the pandemic.
Ant Financial Services Group, by billionaire Jack Ma, showed an increase in its participation in the Chinese banking sector. The business sector, which turned to its digital technology to maintain the flow after the coronavirus outbreak, forced the closure of branches in the most populous nation in the world.
The number of clients paying Ant Group to help them create mobile apps and provide cloud computing power increased 175% in the two months through April and is now working with more than 200 lenders, according to the company.
Moreover, the number of searches to collaborate with the technology giant increased by 400% during the period.
Ant entered banking territory as a disruptor, ringing alarm bells for many of the country’s 4500 lenders. However, approximately two years ago, it also expanded its strategy to sell services to banks. While it had a weak response, the COVID-19 outbreak now drives Ant, at least among the nation’s smallest regional lenders.
For Ant, the drive for open banking is crucial. In addition to selling technology to banks, it includes a consumer lending platform and also supports MYbank, an online lender that has embarked on a wave of $280 billion loans this year. Ant is about to generate 65% of its income from these services by 2021, up from 35% in 2017.
The virus outbreak was an impact for China’s beleaguered smaller banks, already struggling with mounting credit losses in recent years. As of May 4 this year, more than 800 bank branches have been permanently closed, according to China’s banking regulator.
Ant Financial has also connected with larger banks. Jack Ma’s new company convinced Industrial & Commercial Bank of China Ltd. to work together on developing financial technology services in December. It is expected by Alibaba, which owns a 33% stake in Ant Financial.
Jack Ma’s Burgeoning Business Threatens Credit Cards
Ant Financial is the largest player in the Chinese payments market. And its strategy is broad: it uses the information collected by Alipay to grow in consumer loans.
Visa Inc., MasterCard Inc., and American Express Co. are about to enter China for the first time, and one of their biggest competitive threats will come from a company that does not issue credit cards.
Already the biggest player in China’s $27 trillion payment market, Jack Ma’s Ant Financial is leveraging its ubiquitous Alipay mobile app to organize a rapid expansion in consumer lending.
Instead of issuing cards, Ant allows customers to borrow with a few taps on their smartphones.
The loans are very popular with China’s massive group of smart mobile device buyers, who often lack a formal credit history but generate enough financial data through Alipay for Ant to make informed decisions about the possibility of default.
The company’s outstanding consumer loans could grow to nearly $290 billion by 2021, according to analysts at Goldman Sachs Group Inc., more than triples the level two years ago.