Sony's New Net Bank and You
Reuters
6:00 a.m. 9.Mar.2000 PST
TOKYO -- Japan's Sony Corp., which plans to launch an Internet bank next year, will focus on individual customers in a bid to attract one trillion yen ($9.3 billion) in deposits within five years, a company official said on Thursday.
If issued a licence, the bank will specialize in providing retail services over the Internet, such as deposit-taking and consumer lending, and will have no branches, the official said.
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Operating such a bank is expected to boost the financial clout of Sony, the world's second-largest maker of consumer electronics, which already has insurance and online brokerage units.
The move is part of intensifying competition from non-financial companies for a slice of Japan's lucrative retail financial services market.
Japan's top retailer, Ito-Yokado, has already announced a plan to set up a bank as early as August utilizing its 7-Eleven Japan chain of 9,300 convenience stores. That bank will focus on settlement services, such as bill-paying, as well as deposit-taking, but will not lend money.
By contrast, Sony plans to offer the usual line of commercial banking services, including mortgage lending. "The settlement service alone does not make good business," the Sony official said.
"Because we will have no branches, we need to cooperate with other banks" so that our customers can use their automated teller machines to deposit and withdraw money, he also said.
But he denied speculation that Sony is in talks with Ito-Yokado about using the extensive ATM network that retailer will set up after obtaining a banking licence.
Japanese regulators are now studying whether to grant banking licences to non-financial firms.
Analysts expect regulators to approve licences for Ito-Yokado and Sony and to announce entry guidelines by 31 March, the fiscal year-end.
"Any refusal would be slammed as backtracking on promised Big Bang financial deregulation," said Nozomu Kunishige, a senior analyst at Lehman Brothers.
Analysts say some other companies may follow suit after Ito-Yokado and Sony are granted banking licences. But there will not be a rush because only a handful of blue chip firms would be eligible, they say.
"Any prospective candidate should be financially sound and have high credit ratings," said Kunishige.
Among companies mentioned which may follow suit is Toyota Motor Corp., which enjoys strong cash flow and already has a financial unit dealing with mortgage loans, analysts say.
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