(Bloomberg) -- Ant Financial, the Alibaba affiliate controlled by billionaire Jack Ma, posted 4.3 billion yuan ($611 million) in pretax profit, bolstered by expanding credit financing and technology services it provides to other financial institutions. The internet giant's business now covers everything from wealth management to payments to credit scoring.
It's defying the drag brought on by its inability to make interest from funds parked in its Alipay wallet ever since China's central bank became the custodian of all deposits for third-party payment platforms. E-commerce giant Alibaba Group Holding Ltd. is expected to take a one-third stake in Ant, a pending deal that was announced in February 2018.
The profit was calculated based on the 1.6 billion yuan of royalty and software technology services fees agreement between Alibaba and Ant Financial.
In its financial report, Alibaba beat the highest analyst estimate with revenue that rose 42% to 114.9 billion yuan ($16.3 billion) for the three months ended June, surpassing the 111.6 billion yuan average estimate. Its shares climbed more than 3% in pre-market trading.
To contact the reporter on this story: Lulu Yilun Chen in Hong Kong at ychen447@bloomberg.net
To contact the editors responsible for this story: Edwin Chan at echan273@bloomberg.net, Colum Murphy, Peter Elstrom
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