Mitsubishi UFJ (MUFG) to Extend in APAC With New Investment
Mitsubishi UFJ Financial Group, Inc. MUFG and its consolidated subsidiary — MUFG Bank — are set to invest in Globe Fintech Innovations, Inc. (“Mynt”), the firm that manages GCash. MUFG will invest $393 million in Mynt as it extends its foothold in Asia’s booming digital financial market.
Globe Fintech Innovations operates the Philippine mobile wallet GCash, specializing in QR code-based mobile payments with a user base of more than 60 million. With a valuation of $5 billion, the company is considered a ‘unicorn.’
MUFG's strategic investment in Mynt intends to accelerate growth in Asia-Pacific. The company aims to expand its customer base and promote financial inclusion by integrating Mynt into various online and offline channels. By accepting Mynt as a new member of MODE, MUFG hopes to expand its digital technology skills and collaborate with Mynt's significant partners, notably the Ayala Group.
Although underbanked and unbanked individuals in the Philippines lack access to traditional financial services, the country's high mobile phone and internet penetration provides a strong basis for the growth of digital financial services.
This investment supports MUFG’s strategy to expand in the Asia-Pacific (APAC) region, which it considers a second home market. Within this region, there is a growing trend for digital financial service providers to utilize the latest technological advancements. These advancements offer financial services to unbanked or underbanked consumers and SMEs.
Taking advantage of the growing market, MUFG invested in several digital startups and tech firms in the APAC region since 2020. These include investments in Grab, Home Credit, Akulaku, Garuda Fund and DMI Finance.
In June 2024, MUFG signed an investment agreement for $195 million in Ascend Money, which offers advanced payments and financial services to 30 million active users across seven Southeast Asian countries.
In 2023, the bank launched the MUFG Openly Connected Digital Ecosystem, intending to share knowledge among the companies that Mitsubishi UFJ invested in.
Through this strategic investment, MUFG aims to reap the benefit of fast-growing digital finance in the APAC region. It will also enhance the bank’s business franchise value over the medium to long term. Through this investment, MUFG intends to grow its customer base while seeking further business collaboration opportunities within its network.
In the past six months, shares of MUFG have gained 15.2% on the NYSE compared with the industry’s 13.1% growth.
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Currently, Mitsubishi UFJ carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Foreign Bank Expanding Foothold in Asia
Similar to MUFG, HSBC Holdings plc HSBC has been undertaking measures to bolster its performance with a special focus on building operations across Asia. HSBC intends to position itself as a top bank for high-net-worth and ultra-high-net-worth clients in the region.
This June, the company completed acquisition of Citigroup's C retail wealth management business in China. As a result of the sale, portfolio of investment assets and deposits, and associated wealth customers, covering 11 major citiesi in mainland China has been integrated into HSBC China’s Wealth and Personal Banking (“WPB”) operations.
Earlier in April 2024, the bank planned to sell its various business units in Germany to focus more on core operations in Asia.
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