The banking unit of Internet retailer Rakuten Group Inc increased the forecast for the year ending March by about 6%. — Reuters
TOKYO: Rakuten Bank Ltd shares jumped the most in more than four months after the Japanese online lender raised its annual profit forecast, providing a rare boost for its beleaguered parent company.
The stock climbed almost 13% in Tokyo yesterday morning, the biggest intraday gain since Sept 26.
The banking unit of Internet retailer Rakuten Group Inc increased the forecast for the year ending March by about 6%, citing rising interest income from loans and the expanded scale of its business.
Rakuten Bank has been enjoying growth in its customer base, thanks to the group’s reward point system designed to lock in users.
The lender is also expected to benefit from potential interest-rate increases by the Bank of Japan because most of its investment assets are tied to floating rates.
The bank’s fiscal third-quarter net income totalled about nine billion yen (US$60mil), in line with analysts’ estimates.
It now sees a full-year profit of 33.5 billion yen.
Shares of Rakuten Bank have jumped more than 80% since it was listed in April.
The debt-laden parent company, which is heading for a fifth year of losses, reports later.
It lowered its stake in the online bank in December to 49.27% from 63.34%, but retained it as a subsidiary.
Founded by former investment banker Hiroshi Mikitani, Rakuten has expanded beyond its core eCommerce operation.
Some of those bets, such as in online banking and securities, have been lucrative, but a 2020 foray into Japan’s saturated mobile phone market has pulled it deeper into debt. — Bloomberg
