Wednesday June 14, 8:52 pm Eastern Time
RPT-Softbank's Son says NCB aims at Net banking in 2001
By Jane Macartney
TOKYO, June 14 (Reuters) - Masayoshi Son, president of ambitious Japanese Internet investor Softbank Corp , said on Wednesday he hoped to offer Internet-based banking as early as next year through a failed bank he bought this month.
Son voiced confidence that the recent tumble in the price of Softbank's shares, along with other Internet stocks, would recover in the long term. Share prices ``typically go up and down over the short term,'' he told Kyodo news agency in an interview.
``If you ask me whether the market value of the Net industry peaked in February, I do not think so,'' said Son, who ranked as possibly the richest man in the world after Bill Gates when Softbank shares leapt to a lifetime high of 198,000 yen on February 15.
Softbank closed at 18,330 yen on Wednesday, up 6.32 percent from the day before.
Son, who has said he wants to create a ``zaibatsu'', or traditional Japanese conglomerate, said he wanted to distinguish his services from those of conventional Japanese banks by offering loans based not on collateral but on earnings capacity.
``In various Net businesses, financial services are the area that will show the strongest growth in the years ahead,'' Kyodo quoted Son as saying.
The remarks were his most detailed yet on his plans for entering Japan's tightly protected banking sector since a Softbank-led consortium agreed to buy bankrupt Nippon Credit Bank (NCB) this month for 101 billion yen ($943.2 million), giving it an 80 percent stake.
Softbank would take a stake of close to 40 percent, while its partners, leasing firm Orix Corp and Tokio Marine & Fire Insurance Co Ltd , plan to hold just under 15 percent each. Softbank wants to list the new NCB in three to five years, Son has said.
Remaining stakes would be held by foreign banks and Japanese regional banks. Japanese media said the foreign banks were Lehman Brothers Holdings Inc (NYSE:LEH - news), Chase Manhattan Corp (NYSE:CMB - news) and UBS AG , which would invest about 20 billion yen.
SOFTBANK'S BANKING AMBITIONS QUESTIONED
But many analysts have questioned what Softbank Corp hoped to gain from a venture that risked pulling it too far from its core business, and just how much of a scare the resuscitated NCB would prove for the nation's debt-heavy banks.
Several also said that, if Softbank's goal is Internet banking, it does not need NCB's huge assets, loan book and ``old Japan'' client base.
NCB, which collapsed under the weight of bad loans extended during an asset price bubble a decade ago, was placed under state control in December 1998. It is a conventional Japanese bank that specialises in real estate-related lending and offering financial services to medium and small businesses.
Son said that, following the purchase by the consortium, NCB would first target corporate customers and then expand to retail customers.
With NCB as the core of Softbank's Internet financial business, Son said he wanted to start deposit-taking and financial settlement services via the Internet next year.
In lending to corporate clients, NCB would reject conventional Japanese banks' practice of focusing on collateral regardless of whether the borrower's business is well run, Son told Kyodo.
``In contrast, European and American banks look at how much interest (the borrower) can pay based on earning capacity,'' Son said. For example, NCB could reduce the interest rate on loans automatically if a borrower achieves certain business targets.
``We are thinking that we will generate many business chances if we see things from that perspective,'' he said.
He did not refer to expectations that Softbank might use the new bank to finance Internet startups, a policy that could prove difficult under newly proposed rules that would keep banks and their non-bank parents at arm's length, analysts have said. |
