Japan's Mitsubishi UFJ Financial Group Inc. is pouring in over $700 million in ride-hailing company Grab, gaining entry to millions of customers across the Southeast Asian region that use the cellular app to book rides and meals.
Based on a Wednesday report by Japanese news agency Nikkei, citing sources with knowledge of the deal, MUFG and Grab will make public their tbusiness partnership soon.
The collaboration comes as the Japanese banking empire steps up efforts to boost its foothold in the Southeast Asian region. Grab's "Super" app allows users to order meals and book hotel reservations, on top of hailing cabs and sharing rides.
Grab, one of many ride-hailing startups supported by the SoftBank Group, is trying to establish a regional super-app that will offer a a wide array of services that will also cover payments and finance.
The startup said its app has been downloaded onto over 166 million hand-held gadgets in the Southeast Asian region. Grab, which has been granted around $2.6 billion in funding by SoftBank, is currently wooing other major lenders for bigger capital as the startup promotes new services.
Just recently, Grab acquired of Singapore-headquartered robo-counseling startup Bento to control and operate its retail and wealth management portfolio. The service will be rebranded bearing the name GrabInvest and is set to be unveiled in Singapore by the middle of this year.
Grab is also among 21 companies bidding in Singapore currently vying for an electronic banking permit, which the Monetary Authority of Singapore will be releasing in the next few months.
Forming a partnership with Singtel, Grab is looking to comply with the demands of "digital-first clients" as well as underserved small and medium enterprises, if their application is approved.
The main objective of MUFG Bank is to leverage its business cooperation with Grab to broaden its reach to clients and include those who have less exposure to traditional banking systems.
MUFG completed a takeover of PT Bank Danamon Indonesia in 2019. Incoming CEO Hironori Kanazawa, who was appointed to the organization's top position in January is currently leading the PT Bank's digital ventures.
Earlier this month, MUFG reported its first quarterly loss in 10 years and trimmed down the company's annual earnings estimate after booking a huge charge on the Indonesian deal.
Profitability in lending is taking a heavy blow as Japan braces for its fifth year of dismal interest rate figures. Even so, the premier Japanese bank's rivals Mizuho Financial Group Inc. and Sumitomo Mitsui Financial Group Inc. gained decent sales in the last three months after earning from its lending business.
