(Bloomberg) -- Ant Group Co.’s profit fell to $2.1 billion in the March quarter after Chinese regulators thwarted its record initial public offering and told it to overhaul its sprawling operation.

Billionaire Jack Ma’s fintech giant contributed nearly 4.5 billion yuan ($696 million) to Alibaba Group Holding Ltd.’s earnings, a company filing showed Tuesday. Based on Alibaba’s one-third stake in Ant, that translates to 13.6 billion yuan in profit, down 37% from the previous three months. Ant’s earnings lag one quarter behind Alibaba’s. Ant declined to comment.

The fall in profit underscores the challenges facing Ant following a widespread crackdown on China’s most powerful technology corporations. In response, the country’s largest fintech is folding its financial business into a holding company that will be regulated more like a bank. Regulators have also issued a battery of proposals that threaten to curb Ant’s dominance in online payments and scale back its expansion into consumer lending and wealth management.

China has widened its net of crackdowns, now expanding tightening to everything from ride-hailing and edtech, to food delivery and monopolistic practices in music streaming. The policies shook global investors, sparking a $1 trillion selloff.

While Chairman Eric Jing has promised staff that the company will eventually go public, it’s likely to be worth much less than before the crackdown that began last year. Fidelity Investments halved its valuation estimate for Ant to about $144 billion in February, compared with $295 billion in August last year.

In June, regulators approved Ant’s consumer finance unit, limiting the company’s ability to lend on its own and in partnership with banks. The operation folds in its two most well-known consumer lending businesses, Huabei and Jiebei. The unit will need to provide 30% of funding for all co-loans, based on rules released earlier this year. At 10 times leverage of its registered capital, that means its total amount of joint loans will be capped at 266 billion yuan.

The company’s affiliate Alibaba reported revenue of $31.8 billion, missing estimates and suggesting plans to hike spending in pursuit of growth have yet to gain traction.

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