Schwab's Japan venture eyes retail footing
TOKYO, Oct 20 (Reuters) - U.S. discount brokerage giant
Charles Schwab Corp said on Wednesday its Japanese joint
venture would set up six to 10 retail trading centres which would
make it the second foreign firm with retail networks in Japan.
Charles R. Schwab, founder and chairman of the San
Francisco-based Charles Schwab, said the venture, set up with
Japan's Tokio Marine & Fire Insurance Co Ltd <8751.T>, would
establish the retail network in the next three to four years.
He said the venture would aim to attract around 500,000
customers in Japan in the first three to four years.
The venture, Charles Schwab Tokio Marine Securities Co Ltd,
aims to offer both online trading and face-to-face retail
services, joining in the heightened race by foreign and domestic
financial firms to take a pie in the nation's lucrative
individual savings and other assets of more than 1,200 trillion
yen.
Merrill Lynch last year became the first foreign
brokerage that owns a retail branch network in Japan after taking
over branches of failed Yamaichi Securities.
Schwab told a news conference that the venture would start
online trading of U.S. stocks and investment trusts on December
1. Trading in Japanese shares would start shortly after April
next year, he added.
"As for fees, we've always been very competitive, although
never the lowest," Schwab said. "That will be the case in Japan
too."
Asked about profitability, he said: "In the U.S., it took us
three years to see profitability and in Japan we're also in it
for the long-term."
Analysts have said the joint venture between the largest U.S.
discount broker and Tokio Marine, Japan's biggest non-life
insurer with a customer base of about 17 million, had a strong
edge over competitors.
Online broking is expected to take off in Japan as cash-rich
Japanese investors, fed up with razor-thin interest earnings on
bank deposits, have started to show greater interest in mutual
funds, which have the potential for high yields.
Foreign brokerages have scrambled to enter the online broking
business in Tokyo, with E*Trade having formed an online
venture with Softbank Corp <9984.T>, whose wide-ranging Internet
investments include a slice of the U.S.-based search engine
Yahoo!
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