The largest bank in Japan, Mitsubishi UFJ Financial Group (MUFG), has invested over $700 million in Grab, a ride-hailing company in Southeast Asia that also provides food delivery and other services for its customers, according to a report by Bloomberg.
The move will give MUFG access to the company’s millions of daily users. MUFG wants to offer financial services and loans to Grab users. Grab, for its part, wants to build a super-app that would offer a plethora of useful services.
Grab hasn’t shared exactly how many users it has, but it said its app has been downloaded on over 166 million devices. The company has gotten $2.6 billion from SoftBank, and it’s looking for more sources of funding to expand.
MUFG wants to strengthen its presence in Southeast Asia, which the bank sees as an important factor in future growth as Japan’s market continues its slowdown.
In 2019, MUFG took over PT Bank Danamon Indonesia, and CEO Hironori Kamezawa is in charge of digital endeavors.
MUFG posted a quarterly loss this month for the first time in 10 years, and it was forced to chop annual profit forecasts after dealing with a large charge on the Indonesian bank acquisition.
Japan has been facing negative interest rates for half a decade now, and many banks are feeling the pressure to continue to find sources of profit.
Despite the difficult ecosphere for financial institutions in Japan, both Sumitomo Mitsui Financial Group and Mizuho Financial Group saw higher profits from lending.
MUFG has had its share of troubles in the past year as well.
In May, the European Union fined Barclays, RBS, Citigroup, JPMorgan and MUFG 1.07 billion euros ($1.16 billion) over allegations that they worked together to manipulate the foreign exchange market. Investigators found that the banks used chat rooms to exchange information about prices, orders and trading activities.