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Friday, 23 March, 2001, 12:49 GMT
Sony to launch online bank
sony japan website
Soon Sony will have an online banking presence in Japan
The Japanese government has given Sony the provisional go-ahead to set up an online bank.

The company said it would apply for a banking licence, now that the Financial Services Agency has given Sony its preliminary approval.

The new bank would be the first lender in Japan to be set up by a non-financial company.

Internet banking is still in its infancy there, with many people still wary about conducting financial transactions online.

Sony Bank aims to change all this, and to capitalise on its parent company's brand name to lure in customers, providing them with low-cost services.

"The intention is to provide comprehensive personal banking services which exploit the special merits of the internet," the company said.

It added that it was aiming at a June launch date.

Branching out

Sony has put 37.5bn yen ($305m) into the bank, which it is operating with partners Sakura Bank and US investment bank JP Morgan, who will jointly own a 20% stake in the venture.

Sony will own the remaining 80%.

Sakura Bank already controls an online bank, the country's first, called Japan Net Bank, set up last October.

It has about 38,000 account holders, who are mostly younger professionals.

The new Sony bank aims to have 400,000 customer accounts worth 600bn yen within three years, rising to 600,000 accounts, worth one trillion yen, in five years.

Initial services will include yen deposit accounts and investment trusts.

Within the first year of operation, the new bank also aims to branch out into foreign currency deposit accounts, a credit card business and housing loans.

Customers of the new bank will have access to Sakura Bank's network of ATM machines.

Banking in crisis

Sony Bank Inc will be the latest entrant into a sector which is crippled by bad loans and tumbling share prices in the wórld's second biggest economy.

On Monday, the Bank of Japan brought back its zero interest rate policy, in an effort to boost the country's ailing economy.

And it has guaranteed to keep the troubled banking sector afloat by flooding the economy with money if a major bank was threatened with bankruptcy.

The Sony Corporation already has a growing financial profile, with affiliates providing life assurance, general insurance and credit services.

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See also:

15 Mar 01 | Business
Bank woes plague Japan
19 Mar 01 | Business
Japan cuts rates to zero
03 Oct 99 | The Company File
Japan's Electronics Giant
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