Mitsubishi UFJ Financial Group (MUFG) is considering making an offer to acquire WealthNavi, a leading Japanese robo-advisory firm, as part of its strategy to strengthen its presence in the growing fintech sector and tap into the increasing trend of Japanese households moving their savings online.
MUFG, Japan’s largest bank, will discuss the potential acquisition at an upcoming management meeting on Friday, although it stressed that no final decision has been made. Earlier this year, the bank took a 15% stake in WealthNavi, which went public in 2020 and now has a market value of ¥62.8 billion (approximately US$416 million).
WealthNavi, which provides automated wealth management services, including cash-to-investment transfers, manages ¥1.34 trillion in assets as of the end of October. The company forecasts an operating profit of ¥531 million for the year. WealthNavi will also hold a board meeting to discuss the acquisition proposal.
This move comes as Japanese financial firms are keen to encourage domestic households to invest more of their significant cash savings, which are currently estimated at US$7.5 trillion, especially as inflation rises. The expansion of Japan’s Nisa tax-free investment programme has spurred more individuals to open investment accounts, contributing to a stock-market boom.
According to Citigroup analyst Koichi Niwa, acquiring WealthNavi would help MUFG build a more comprehensive “finance super-app,” consolidating a range of financial services into one platform. This would also enable WealthNavi to expand its service offerings and better compete in Japan’s rapidly growing robo-advisory market.
The robo-advisory market in Japan is expected to reach ¥3 trillion in value this fiscal year, with projections indicating it could grow to around ¥12 trillion by 2030, according to research by Yano Research Institute. This boom in robo-advisory services reflects the broader shift towards digital investment tools, especially as more people turn to online platforms for managing their savings.
