Japanese e-commerce giant Rakuten to list its online bank | Investment News

By Makiko Yamazaki and Sam Nussey

TOKYO (Reuters) – Japanese e-commerce firm Rakuten Group Inc said on Thursday it was preparing to list its online banking unit, raising cash while absorbing losses incurred while building out its mobile communications network Low cost.

Rakuten Bank Ltd’s planned initial public offering (IPO) will give the unit’s management more autonomy “to consider various growth and financial strategies, including its own financing,” Rakuten said in a statement. He did not disclose the financial terms of the listing.

Rakuten, which itself is worth $15 billion in market cap, is under pressure on multiple fronts, expanding its mobile network against cash-rich incumbents and investing in logistics to compete with Amazon.com.

Founder Hiroshi Mikitani shook up the country’s financial industry by simplifying credit card applications and securing more than 11 million current accounts and deposits of more than six trillion yen ($54 billion).

The group, which posted an operating loss of 101 billion yen in the six months to the end of June, is one of Japan’s leading internet companies increasingly harassed by foreign tech giants.

“If the equity financing proceeds as expected over the next approximately 12 months, we believe Rakuten can mitigate a deterioration in its finances due to initial investments in its mobile unit,” said S&P Global analyst Makiko Yoshimura. Ratings, in a press release. report.

Rakuten aims to sell its mobile network technology worldwide. He says his technology radically reduces the cost of building such networks using cloud-based software.

The company has forced rivals in Japan to cut carrier fees in the face of the lowest prices as Rakuten expands its network. Still, the mobile unit’s losses widened a year earlier to 197 billion yen in the January-June period.

(Reporting by Makiko Yamazaki and Sam Nussey; Editing by Muralikumar Anantharaman and Kenneth Maxwell)

Copyright 2021 Thomson Reuters.

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David A. Albanese