MITSUBISHI UFJ Financial Group (MUFG) is considering a bid to take over Japanese robo-advisory firm WealthNavi, as it looks to expand its financial-technology capabilities and cater to households going online to invest more of their savings.
Japan’s biggest bank will discuss the matter at a management meeting on Friday (Nov 29), it said, adding that no decision has been made. The Nikkei newspaper reported earlier that MUFG was planning to launch a tender offer.
MUFG took a 15 per cent stake in WealthNavi earlier this year. The Tokyo-based fintech company, which listed in 2020, has a market capitalisation of 62.8 billion yen (S$560 million). Separately, WealthNavi said it will discuss the matter at a board meeting on Friday.
Japanese financial firms are expanding services to help households invest more of their US$7.5 trillion in cash as inflation emerges in Asia’s second-largest economy. More people have been opening so-called Nisa accounts following the expansion of the country’s tax-free investment program this year, helping to fuel a stock-market rally.
Acquiring WealthNavi would boost MUFG’s prospects for “creating a more comprehensive finance super-app”, Koichi Niwa, an analyst at Citigroup in Tokyo, wrote in a note. It would also help WealthNavi provide a full range of financial services on its platform, he added.
Founded by chief executive officer Kazuhisa Shibayama in 2015, WealthNavi provides online wealth management services including automated transfers of cash to investment products. It managed 1.3 trillion yen as at Oct 31, according to an earnings presentation. It expects operating profit of 531 million yen this year.
Shares of WealthNavi were untraded and set to rise on Friday morning in Tokyo. The stock has slid 46 per cent this year. MUFG gained 0.5 per cent, taking this year’s advance to 47 per cent.
Japan’s robo-advisory market is projected to reach three trillion yen this fiscal year and forecast to grow to around 12 trillion yen by 2030, according to Yano Research Institute. BLOOMBERG
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