Japanese Rakuten to Go Public with Online Banking Unit

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TOKYO – The Rakuten Group announced on Thursday that it is preparing to list the shares of its online banking subsidiary Rakuten Bank on the stock exchange, which would raise funds for its fastest growing segment as the group at broad sense suffered heavy losses during its forays into telecommunications companies.

The board of directors of the Japanese e-commerce group also decided to integrate its new telecommunications solutions business, Rakuten Symphony, which launched in August.

“Rakuten Bank believes that through the listing of its shares, it will be possible to exercise management with a more autonomous perspective, and to consider various growth and financial strategies, including its own financing,” the group said. in a press release.

Rakuten Bank’s profit grew 6% year-on-year in the first half of 2021. In July, the bank hit its target of 11 million accounts and 23 million credit cards issued, while the securities segment grew. registered 6.24 million brokerage accounts.

“The credit card business, which generates most of the [the] the profits of the financial unit, will remain a wholly owned subsidiary and the heart of the unit, ”S&P Global analysts said. “Rakuten assumes that even after listing, the bank will remain a significant consolidated subsidiary as it expands its ecosystem. We don’t expect any major changes in Rakuten’s actual control over the financial unit. “

Meanwhile, capital costs for the year-old Rakuten Mobile segment left the group with a loss of 65.4 billion yen ($ 590 million) for the first half of the year. Elsewhere, Rakuten’s flagship e-commerce business lost ground to Amazon as its share of the Japanese market fell to 12.6%. Amazon took a 25.7% share.

A registration date has not been decided, the company said. Earlier this year, Rakuten raised 242.3 billion yen by issuing new shares to Japan Post Holdings, Tencent Holdings and Walmart.

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