Rumour: Cathay Financial to Buy Rakuten Monkeys?

Cathay Financial Wants to Buy a CPBL Team?

On August 29, rumours began to circulate online that Cathay Financial, one of Taiwan’s largest conglomerates, is interested in buying the Rakuten Monkeys professional baseball team from Rakuten Inc. According to various internet rumours, both companies have been in talks since last year.

At the time of writing this blog post, both Cathay Financial and Rakuten Monkeys have not commented on this rumour.

Note: This is only the rumours that I gathered online. Please take it with a grain of salt. Everything here is purely speculative. I have zero inside knowledge, and this blog post is solely for entertainment purposes.

Responses From Cathay Financial and Rakuten Monkeys (UPDATE: August 30)

When asked by TSNA, the Rakuten Monkeys’ general manager, Roger Pu, declined to elaborate and simply mentioned that he is unwilling to respond to online rumours.

A few hours later, SET News reported that according to their insider, the top executives at Cathay Financial have never discussed entering the professional baseball industry, nor have they approached any baseball team.

Cathay Financial’s $865M Land Development Deal in Taoyuan City

It is worth mentioning that back in May 2022, Cathay Financial announced a land development deal worth 865 million USD near the Taoyuan high speed rail station.

According to Cathay Financial’s press release, they plan to build office buildings, shopping centre, hotel and other entertainment facilities over 10.58 hectares of land.

While being involved in a land development deal doesn’t automatically mean they will buy the baseball team, it does make some sense to have an even closer connection with the city by owning a local professional baseball team. And since Taoyuan baseball stadium is only two minutes away when taking the metro from the high speed rail station, it’s an excellent add-on for the overall package.

And let’s face it, the on-going cost of running a CPBL team will be like pocket change for a big conglomerate like Cathay Financial.

Rakuten Bank’s Performance in Taiwan

Another reason that might supports the theory of Rakuten wanting to sell their CPBL baseball team could be partly due to the less-than-ideal performance of their online bank business in Taiwan.

According to Taiwan’s Financial Supervisory Commission, in June 2023, Rakuten Bank reported a loss of 53 million USD for the first six months of 2023. The company reported a loss of $35.6 million for its first two quarters in 2022.

• Rakuten Bank (2023 Q1-Q2) – Loss of 53 million USD
• LINE Bank (2023 Q1-Q2) – Loss of 70 million USD
• NEXT Bank (2023 Q1-Q2) – Loss of 93 million USD

Officials from Taiwan’s Financial Supervisory Commission (FSC) have indicated that the three online banks have been in operation for 1 to 2 years and are still in the early stages. It is estimated that it will take about five years of operation to break even.

In terms of customers, despite launching their online bank platform six months ahead of all their competitors, as of June 2023, Rakuten Bank only has around 159,000 customers. Meanwhile, two of Rakuten Bank’s direct competitors, LINE Bank, has a customer number of around 1.49 million, and NEXT Bank has a customer base of 296,000.

It makes people wonder, if this online bank business is still worth it for Rakuten to keep it going. Or is it the time to cut their losses? Or perhaps, cutting other expenses elsewhere, such as a professional baseball team in the CPBL?

Although we are talking about digital banking services, there are still some loose connections to the CPBL. There are three out of six CPBL teams’ parent companies have a stake in this industry.

• Rakuten Inc (Rakuten Monkeys) – 51% stake in Rakuten Bank.
• Fubon Financial (Fubon Gaurdians) – 35% stake in LINE Bank.
• CTBC Finanical (CTBC Brothers) – 2.5% stake in LINE Bank.

Quick Profile on Cathay Financial

Cathay Financial Holdings is a major player in Taiwan’s financial industry, operating across multiple sectors like banking, insurance, properties, securities, and others. In 2022, Cathay Financial reported an impressive 5 billion USD in profits that included $34.5 billion in revenue and $418.7 billion in assets.

Notes: I didn’t include the figures for Taiwan Steel Group (TSG Hawks’ parent company). This is because there are too many companies within the Taiwan Steel Group for me to compile.