By Gursimran Kaur and Selena Li in Hong Kong

(Reuters) – Fintech giant Ant Group has outbid billionaire Ken Griffin’s Citadel Securities for Credit Suisse‘s investment bank venture in China, Bloomberg News reported on Sunday, adding it was unclear whether the Chinese company’s offer would succeed.

Alibaba Group affiliate Ant Group’s bid to build a securities business in China using Credit Suisse’s operations would face a thorough review because Beijing favours a foreign buyer, the report said, citing people familiar with the matter.

Seller UBS, now the owner of Credit Suisse, will now face a dilemma in choosing between the higher local bid from Ant, or the lower Citadel bid submitted in December offering about 1.5 billion yuan ($208.47 million) to 2 billion yuan that is more likely to win government approval, the report added.

Ant Group declined to comment. The fintech giant has been working under the guidance of Chinese regulators to turn itself into a financial holding company to ensure its financial-related businesses are fully regulated.

UBS and Citadel did not immediately respond to Reuters requests for comment.

The bidding for Credit Suisse’s China securities operation comes as the domestic A-share market battles an exodus of foreign capital and stricter scrutiny on initial public offerings as the world’s second-largest economy slows.

UBS’ takeover of Credit Suisse, the biggest bank merger since the 2008 global financial crisis, was hastily arranged last year by Swiss authorities to avert Credit Suisse’s collapse.

The merger resulted in UBS owning two majority-owned securities firms in China, where a company is only permitted to operate one.

The Swiss bank began seeking buyers in the middle of last year. Global financial firms such as Citigroup seeking to make inroads into China’s domestic securities market had expressed interest in making an offer.

Citadel Securities CEO Peng Zhao told Reuters in November the U.S. largest market maker was “actively exploring” establishing a licensed onshore business in China.

The unit for sale – Credit Suisse Securities China – was formerly 51% controlled by Credit Suisse and 49% by Founder Securities.

Founder agreed to be bought out by Credit Suisse for 1.14 billion yuan, which valued the firm at about 2.3 billion yuan, before the UBS merger in a deal that has yet to receive Chinese regulatory approval.

Reuters this month reported UBS was planning headcount cuts in the coming months as the bank’s China-focused bankers swelled after it took over Credit Suisse.

($1 = 7.1952 Chinese yuan)