Saudi Arabia-backed SoftBank fund to invest $333m in Uber

Updated 21 April 2019
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Saudi Arabia-backed SoftBank fund to invest $333m in Uber

  • Toyota has already invested $500 million in Uber as the firm races a host of other companies to develop self-driving vehicles
  • Uber is the largest of the “unicorns” or venture-backed firms worth at least $1 billion to list on Wall Street

TOKYO: Japanese car giant Toyota and the Saudi Arabia-backed investment fund SoftBank Vision Fund on Friday unveiled an investment of $1 billion in US company Uber to drive forward the development of driverless ridesharing services.
Toyota has already invested $500 million in Uber as the firm races Google-owned Waymo and a host of other companies, including major automakers, to develop self-driving vehicles.
The latest investment, which also involves Japanese parts maker DENSO, will go to Uber’s Advanced Technologies Group in a bid to “accelerate the development and commercialization of automated ridesharing,” the firms said in a statement.
Toyota and DENSO are stumping up $667 million and SoftBank Vision Fund, the investment arm of Japanese tycoon Masayoshi Son’s SoftBank, will pour $333 million into the venture.
Uber chief executive Dara Khosrowshahi said driverless cars would “transform transportation as we know it, making our streets safer and our cities more liveable.”

 

His firm is aiming to go beyond car rides to becoming the “Amazon of transportation” in a future where people share, instead of own, vehicles.
If all goes to plan, commuters could ride an e-scooter to a transit station, take a train, then grab an e-bike, share a ride or take an e-scooter at the arriving station to complete a journey — all using an Uber app on a smartphone.
Uber is also seeing growing success with an “Eats” service that lets drivers make money delivering meals ordered from restaurants.

The latest cash injection came a week after Uber filed official documents for its much-anticipated public share offering that is expected to be the largest in the tech sector for years.
Uber’s filing with the Securities and Exchange Commission said it operates on six continents with some 14 million trips per day and has totalled more than 10 billion rides since it was founded in 2010.
The filing contained a “placeholder” amount of $1 billion to be raised but that figure is expected to increase ahead of the initial public offering (IPO) expected in May.
The Wall Street Journal said earlier this month that Uber was seeking to raise $10 billion in what would be the largest stock offering of the year.
Media reports said the ride-hailing giant was likely to seek a market value of close to $100 billion.
Uber is the largest of the “unicorns” or venture-backed firms worth at least $1 billion to list on Wall Street, and is one of the key companies in the “sharing economy” based on offering services to replace ownership of cars, homes and other commodities.
Its revenue grew 42 percent last year to $11.2 billion but it continued to lose money from its operations. A net profit was reported for the year from a large asset sale, but operational losses were more than $3 billion.
And some analysts have voiced caution over the forthcoming IPO given a relative lacklustre debut for Lyft, the main US rival.
Khosrowshahi has promised greater transparency as he seeks to restore confidence in the global ridesharing leader hit by a wave of misconduct scandals.

 

FASTFACTS

$100bn

Size of the SoftBank Vision Fund, of which Saudi Arabia has pledged to contribute some $45 billion.


Emirates NBD profit surges on asset sale and forex gains

Updated 37 min 15 sec ago
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Emirates NBD profit surges on asset sale and forex gains

  • Dubai’s largest bank reports 80 percent rise in net profit for second quarter

DUBAI: Emirates NBD, Dubai’s largest bank, reported an 80 percent rise in second-quarter net profit helped by the sale of a stake in Network International and strong non-interest income on foreign exchange gains.

The result included a gain of 2.1 billion dirhams ($572 million) from the sale of a stake in digital payment provider Network International in an initial public offering in London in April.

The earnings showed that top banks in the UAE have still withstood strains from a sluggish economy and a property downturn in Dubai.

Second-quarter net profit jumped 80 percent to 4.74 billion dirhams. EFG Hermes had expected a net profit of 4.06 billion in the second quarter.

The bank said net interest income rose 6 percent in the second-quarter from a year earlier, as growth in assets offset a drop in net interest rate margins.

Non-interest income surged 23 percent, helped by gains in foreign exchange income and investment banking activities.

Provisioning for bad debts more than doubled to 656 million dirhams in the second quarter from a year earlier.

The bank said the cost of risk had increased in 2019 to a more normalized level from relatively better credit quality conditions in 2018.

Cost of risk reflects the price a lender pays to manage its risk exposure. In 2018, Emirates NBD signaled that it expected cost of risk to revert to a long-term level of 80-100 basis points from the 63 basis points seen in 2018.

“The increased cost of risk of 82 basis points in H1 2019 is a result of an expectation of a reversion of credit quality to more normalized levels from the benign conditions in 2018, coupled with the expectation of lower write-backs and recoveries,” it said.

Credit-rating agency Moody’s had warned earlier this year provisioning charges for top banks in the UAE will increase in 2019 owing to pressure in the property and the retail sectors.

The Dubai lender said its net profit surged 49 percent in the first half of the year. “Core operating profit advanced 8 percent compared to the first half of 2018, helped by loan growth, higher foreign exchange income and increased investment banking activity,” the bank’s chief executive Shayne Nelson said in a statement.

Nelson said that the bank continued to make progress on the acquisition of Turkey’s Denizbank and expects this transaction to close in the third quarter of 2019.

Emirates NBD said in April that it was buying Denizbank from Russia’s Sberbank at a roughly 20 percent discount to a previously agreed price, after a steep fall in the Turkish lira.