Softbank considers additional banking operations
By Reuters
Special to CNET News.com
January 28, 2000, 3:55 p.m. PT
TOKYO--Japanese Internet investor Softbank is in informal talks with Fuji Bank on an online banking venture as it tries to push to the forefront of the restructuring of Japan's financial industry.
Softbank's latest step will help encourage Japan's existing banks to accelerate their drive to restructure branch networks and seek new retail channels such as the Internet, analysts say.
Industry sources said that Softbank and Fuji Bank, a leading city bank known as an active online banking player, are in talks on an online banking alliance similar to one Softbank announced yesterday with Suruga Bank, a regional bank.
But it was unclear how soon a deal could be made with Fuji Bank because of Fuji's involvement in a merger project with Dai-Ichi Kangyo Bank (DKB) and Industrial Bank of Japan (IBJ), the sources added.
Softbank and Fuji Bank both declined comment.
The sources said Softbank and Fuji Bank have been in talks for some time, but the pace of the talks slowed as work on Fuji's planned merger with DKB and IBJ progressed.
Last August, Fuji, DKB and IBJ announced they would form a joint holding company, Mizuho Financial Group, by the autumn of 2001 and integrate their operations in early 2002.
The sources said that, as the three banks move forward with their merger, Softbank's online banking deal may be struck with Mizuho. There is also a possibility, they added, that no agreement will be reached.
Softbank yesterday said it had agreed with Suruga Bank, based in Shizuoka, central Japan, to cooperate on Internet banking, with Softbank planning to set up a "virtual branch" within Suruga's network.
Softbank chief financial officer Yoshitaka Kitao confirmed that his company is in talks with a major city bank on setting up an online banking venture, although he declined to name the bank.
"We want to have one online banking venture with a regional bank and another with a city bank," he said.
Fuji Bank is among Japan's top city banks and is already active in online banking. It has an extensive Internet banking service network, called Fuji Cyberbank.
Kitao yesterday said Softbank had decided to go ahead with the tie-up with Suruga Bank because a city bank it talked with was involved in a merger plan, and any deal with that bank would take more time to be agreed upon.
Softbank, known for its investments in more than 150 Web-related companies worldwide, aims to launch banking operations over the Web either in cooperation with existing banks or by acquiring a conventional lender.
It led a consortium that made a bid for the failed Nippon Credit Bank, now under state control. The consortium included Tokio Marine & Fire Insurance, a leading nonlife insurer, and Orix, a top leasing company.
Kitao emphasized that Softbank is still interested in acquiring Nippon Credit Bank.
The Japanese government is now seeking a buyer for Nippon Credit Bank, and a decision is likely in coming weeks.
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