In the past year, MUFG has accelerated its investments in Southeast Asia, despite the global tech slump and rising investor concern about overvalued, underperforming fintechs. Clearly, the Japanese lender has some risk tolerance and is thinking long term.
In November MUFG acquired the Philippine and Indonesian units of Dutch consumer finance company Home Credit BV (HC) for about 596 million euros. HC's main services include point-of-sales loans, offered to customers for their purchases of goods and services at the point of sale both physical and online.
MUFG made the purchases because it believes that HC Philippines and HC Indonesia have high brand recognition and customer satisfaction. They have dominant POS loan market shares in both countries; their app has been downloaded 20 million times in the two countries, and they have a cumulative total of 13 million loan customers.
“Although MUFG already has a certain presence in the Philippines and Indonesia through investments in our equity method affiliate Security Bank Corporation and consolidated subsidiary PT Bank Danamon Indonesia Tbk, this acquisition represents a continued reinforcement and expansion of our retail business in both countries,” the Japanese bank said in a press release.
In late December, MUFG announced it had invested US$200 million in Jakarta-based fintech Akulaku, a strategic tie-up that will see the two companies expand into new markets and products together in 2023. In early 2022, Akulaku raised US$100 million in funding from Siam Commercial Bank as part of another strategic investment. Akulaku, which operates in the Philippines and Malaysia in addition to Indonesia, offers a virtual credit card and installment shopping platform, as well as an investment platform and neobank.
In February, MUFG announced the launch of a US$100 million fund focused on Indonesian startups called MUFG Innovation Partners Garuda No. 1 Limited Investment Partnership. The fund will make strategic investments in startups that can work with Danamon, a commercial bank acquired by MUFG and MUFG Bank in 2019. Danamon’s goals are to increase product competitiveness, promote digitalization and partner with portfolio companies to tap into their customer contacts.
Looking ahead, MUFG’s overseas M&A shopping spree is set to continue. S&P Global noted in a January research note that MUFG expects to close deals worth at least a combined ￥108 billion in Asia-Pacific in 2023.