By Taiga Uranak
(Bloomberg) -- Japan’s Mitsubishi UFJ Financial Group Inc. is investing more than US$700 million in Southeast Asian ride-hailing giant Grab, gaining access to millions across the region that use the mobile app to book cars and meals.
The Japanese financial institution intends to market a range of financial services from insurance to loans to Grab’s users, said a person familiar with the deal who was not authorised to discuss the matter publicly.
Grab, one of several ride-hailing giants backed by SoftBank Group Corp., is trying to build a regional super-app that offers a range of services including finance, payments and rides. The startup, one of Southeast Asia’s largest, doesn’t disclose its number of users -- which include many for food delivery -- but said its app has been downloaded onto more than 166 million mobile devices in the region. The car-hailing giant, which has taken in more than US$2.6 billion from SoftBank alone, is on the hunt for more capital as it builds out and markets new services.
MUFG and Grab intend to announce their alliance soon, the Nikkei reported earlier, citing unidentified people. A Grab representative had no immediate comment when contacted.
Japan’s most valuable lender has been trying to build up its franchise in Southeast Asia, which it sees as an important growth driver to offset a slowing domestic market. Last year, the lender completed the takeover of PT Bank Danamon Indonesia. Incoming Chief Executive Officer Hironori Kamezawa, who was named to the top post last month, is now leading the bank’s digital efforts.
Earlier this month, MUFG posted its first quarterly loss in a decade and cut its annual profit forecast after booking a hefty charge on the Indonesian acquisition. Lending profitability is under pressure as Japan heads into its fifth year of negative interest rates. Even so, MUFG’s rivals Sumitomo Mitsui Financial Group Inc. and Mizuho Financial Group Inc. eked out higher profits last quarter after seeing gains from lending income.
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