NTT Docomo to buy SBI's online bank for 420 billion yen in cut-throat market
[TOKYO] NTT Docomo is buying SBI Holdings' online bank in a 420 billion yen (S$3.7 billion) deal to shore up the Japanese mobile carrier's financial offerings in a hyper-competitive market.
Nippon Telegraph and Telephone's mobile unit will launch a tender offer for SBI Sumishin Net Bank, offering 4,900 yen a share – a 49 per cent premium to the online bank's closing price on May 28.
At the conclusion of the deal, NTT Docomo aims to own 65.81 per cent of the online bank, which will delist. Sumitomo Mitsui Banking Corp will continue to hold 34.19 per cent of SBI Sumishin, the companies said in a statement on Thursday (May 29).
Shares of SBI Sumishin surged by a record 21.3 per cent after local outlets including the Nikkei reported the news earlier. NTT Docomo's stock price rose 0.6 per cent, while SBI Holdings gained 7.8 per cent.
The move is part of a capital alliance between the state-backed telecom group and SBI Holdings, where NTT Docomo will invest 110 billion yen in the venture capital fund operator for a 8.25 per cent stake.
NTT Docomo and SBI Holdings will co-develop new services from asset management to insurance, while NTT Data Group will provide support for SBI Holdings' financial services, executives said.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Sign Up
Sign Up
NTT Docomo, which has close to half of Japan's mobile phone market, has been slow to bolster its financial asset offerings and services compared with its rivals. That is as nimbler competitors have gradually eaten into its dominant share.
Japan's third-largest carrier SoftBank made the country's biggest payments app PayPay a subsidiary in 2022, and recently announced a three-way partnership with Sumitomo Mitsui Banking's credit card operations.
No 2 mobile provider KDDI has its own financial unit. Online shopping mall operator Rakuten Group has started a mobile unit, seeking to expand the reach of its lucrative financial arms via the telecom business.
The acquisition targets existing NTT Docomo customers rather than attract new ones, and is a defensive move to prevent cancellations, said Naoki Fujiwara, senior fund manager at Shinkin Asset Management. If the carrier can expand into areas like investment trusts, it may create additional revenue, he added. BLOOMBERG
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Times
3 hours ago
- Business Times
Bank of Japan urged to keep or slow bond taper pace from fiscal 2026
[TOKYO] The Bank of Japan (BOJ) received a sizeable number of requests to maintain or slightly slow the pace of tapering in its bond purchases from fiscal year 2026 onward, minutes of a meeting between the bank and financial institutions showed on Monday (Jun 2). Despite a recent spike in super-long yields, a significant number of bond market participants also urged the central bank to leave its existing bond taper plan to March 2026 unchanged. The requests, made at a BOJ meeting with bond market participants on May 20-21, heighten the chance the central bank will proceed slowly in reducing its huge balance sheet. The BOJ will conduct a review of its current taper plan and come up with a subsequent programme at its next policy meeting on Jun 16 to 17. 'From the viewpoint of predictability, the Bank should maintain the current pace of the reduction,' one participant was quoted as saying in the minutes about the BOJ's plan for April 2026 onward. The central bank has been slowing bond purchases since August last year to halve monthly buying to three trillion yen (S$27 billion) by March 2026. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up While the participants diverged on how much the BOJ should taper beyond April 2026, several called for reducing its monthly purchases to around one trillion yen to two trillion yen by the end of the new taper programme, the minutes showed. One person called for eventually reducing purchases to zero, while another called for maintaining the current three trillion yen monthly pace 'for a while'. The new programme from April 2026 should display the BOJ's taper plan for a full year, one participant was also quoted as saying. The BOJ's taper review comes at a delicate time. Yields on super-long Japanese government bonds (JGB) soared to all-time highs last month on weak investor demand, as political calls for big fiscal spending flare up ahead of an upper house election slated for July. Many bond market participants warned of declining market liquidity for super-long bonds, with some calling for a response by the BOJ, according to the minutes. 'The Bank should consider making flexible responses for this zone,' such as by suspending reductions in its bond buying or ramping up purchases of super-long bonds, the minutes showed. Some called for making tweaks to the way the BOJ conducts its bond-buying operations so that it can more flexibly adjust the amount of super-long JGBs purchases. Others, however, warned the BOJ against responding too much to swings in super-long yields. 'The deterioration in supply and demand conditions in the super-long-term zone is due to structural factors,' such as weak investor demand relative to the size of issuance, one participant was quoted as saying. 'There is thus limited room for the Bank to address the root cause.' The BOJ has lagged well behind global counterparts in whittling down crisis-era stimulus, having only exited last year a decade-long, massive stimulus aimed at pulling the economy out of stagnation. It also ended negative interest rates last year, though short-term borrowing costs are only 0.5 per cent. The central bank still owns roughly half of outstanding JGBs. REUTERS
Business Times
4 hours ago
- Business Times
Toyota Industries board to discuss six trillion yen buyout on Tuesday
[TOKYO] Toyota Industries said its board will evaluate a buyout proposal on Tuesday (Jun 3) that will take the company private, a move that will strengthen the founding family's grip over Japan's biggest business empire. A group led by Toyota Motor chairman Akio Toyoda is seeking to acquire the subsidiary for six trillion yen (S$54 billion), sources familiar with the matter said last month. Toyota Industries issued a statement on Tuesday in response to reports that the deal will be announced, saying that no specific decisions have been made public. A deal, which would rank among the biggest buyouts on record anywhere, would resolve a parent-child structure that has been criticised in the past and also be in line with the Japanese government's efforts to encourage big companies to unwind cross-held shares with subsidiaries and other businesses. At the same time, a takeover may give Toyoda greater influence over the carmaker founded by his grandfather. 'This matter is scheduled to be discussed at its board of directors meeting to be held today, and the decision made will be promptly disclosed,' Toyota Industries said. Toyoda will put in a personal investment of his own, as will Toyota Motor, according to the sources. Although Akio is chairman of the world's No 1 carmaker, his direct ownership stands at less than 1 per cent, while Toyota Industries has a 9.1 per cent stake in the manufacturer. Shares in Toyota Industries rose less than 1 per cent in early morning trading in Tokyo on Tuesday. The stock is up more than 40 per cent since Bloomberg first reported the takeover proposal on Apr 25. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Toyota Industries, the supplier of textile looms, forklifts and parts for Toyota's cars, was founded by Toyoda's great-grandfather Sakichi, whose son Kiichiro went on to found Toyota Motor, which has become the world's biggest carmaker with annual production of more than 11 million vehicles. The parties involved have picked financial advisers and are working towards a tender offer as soon as November, sources familiar with the matter have said. A special board committee, created to evaluate the proposal as per government guidelines, is evaluating the buyout proposal by a special purpose vehicle established by Toyoda. Toyota Industries will hold its annual shareholder meeting on Jun 10, while Toyota Motor's will take place two days later. There's a complex web of cross-shareholdings among Toyota group companies with Toyota Motor holding 24.2 per cent of Toyota Industries' shares, while Toyota Fudosan, a private real estate developer chaired by Toyoda, owns 5.32 per cent of the supplier. Japan is accelerating efforts to unwind such arrangements among companies, aiming to improve corporate governance, enhance transparency and boost shareholder returns. Toyoda's buyout plan comes as Toyota seeks to rebuild trust in its governance after a series of regulatory scandals were uncovered at a pair of subsidiaries that included Toyota Industries. BLOOMBERG
Straits Times
6 hours ago
- Straits Times
Singapore bonds lifted by pullback from US Treasuries
Melbourne – Asia's top-rated bonds in Singapore and Australia are getting a lift from rising questions about the appeal of Treasuries, as fears that a proposed US tax bill may hit foreign investors add to pressure following a recent ratings downgrade. Strategists and portfolio managers are re-examining whether Treasuries are offering enough compensation, a rare challenge to the place of the world's largest bond market in global portfolios. Taiwanese insurers are making plans to back away from US dollar assets, while Hong Kong pension funds have been told to draw up contingency plans for a further rating downgrade of the United States. 'A huge amount of fiscal risk is not priced into US bonds – the downgrade, the fiscal package, investors stepping away from lending the US government money,' said Kellie Wood, head of fixed income at Schroders in Sydney. 'The potential for a fiscal misstep is increasing.' That is adding to the appeal of the world's dwindling supply of AAA rated bonds. The spread between Australian 30-year bonds and equivalent Treasuries is around its narrowest level in a year, a sign that investors are putting more of their money into the Australian debt. The gap between the same 30-year bonds from Singapore and the US is near a record discount. Australian 10-year yields declined 11 basis points on Friday (May 30), before slightly paring on Monday (June 2). Demand for the bonds is also being fuelled by bets on more interest rate cuts by the Reserve Bank of Australia, which has signaled further easing to soften the blow of global economic turmoil. Fiscal risk Taiwanese and Japanese insurers, and Australian pension funds, have for years piled into the US bond market as the obvious play to pick up safe long-term assets. But recent market volatility and continued questions about the US fiscal position are forcing a re-think. When Moody's Ratings downgraded the US in the middle of May – becoming the last of the three big credit rating companies to lower its ratings from the highest level – it warned that the country's fiscal deficit, government debt and interest burden would all rise over the coming years. It was just the latest sign of growing fears about Washington's fiscal position. Some institutional investors will be hunting for alternatives in the wake of the downgrade, said Ding Yifei, a senior fixed income portfolio manager at Invesco in Hong Kong, adding that AAA bonds in Asia Pacific will be among the winners. A tumble in the value of the US dollar has also put pressure on investors across Asia to find alternatives. When Taiwan's currency surged against the greenback last month, it raised questions about the damage to the island's US$1.2 trillion (S$1.5 trillion) life insurance sector. Regulators have moved to calm nerves, and are now considering easing rules on how insurers report their assets to soften the blow of the US dollar's decline. One large Taiwanese insurer has already begun building a small position in top-rated Australian and UK corporate bonds to diversify from US dollar-denominated assets, according to a money manager at the firm who declined to be identified because they aren't authorised to discuss investment decisions. Reserve managers are likely to shift toward the Singapore dollar market over time given it's the only AAA market in Asia, according to Goldman Sachs. Meanwhile, foreign investors in Australia's government bond market are set to face competition from local pension funds, whose demand for Aussie notes may outpace issuance, according to Bank of America. BLOOMBERG Join ST's WhatsApp Channel and get the latest news and must-reads.
