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SMBC, Yahoo Japan to Tie Up in Online Financial Service

Posted on: Thursday, 30 March 2006, 12:00 CST

By Kyodo News International, Tokyo

Mar. 30--TOKYO -- Sumitomo Mitsui Banking Corp. and Yahoo Japan Corp. said Thursday they have agreed to form a business and capital tie-up in online financial services.

The deal, due to be completed by the end of this year, is aimed at creating new online financial services friendly to Internet users, the partners said.

Under the deal, SMBC will establish a holding company by June to manage its online banking unit, Japan Net Bank. The holding company will take over SMBC's 57 percent stake in Japan Net Bank.

Yahoo Japan will acquire a 14.9 percent stake in the holding company from SMBC for 2.5 billion yen. In the future, the biggest Internet portal will raise its stake to about 50 percent through such measures as buying new shares to be issued by the holding company.

The holding company will increase its stake in Japan Net Bank to up to 80 percent in the future.

While Japan Net Bank will carry out a new share issue in the amount of 30 billion to 40 billion yen later this year, most of the new shares will be accepted by SMBC and Yahoo Japan.

Yahoo Japan intends to contribute up to 30 billion yen to the first full-scale tie-up between a megabank and a leading Internet service provider, bringing its interest in the alliance with SMBC to around 40 percent in effect.

For business collaboration, SMBC and Yahoo Japan will jointly develop financial products for online sale. The partners will also develop an account settlement system in favor of users of Yahoo Japan's online shopping, auction and other services.

Announcing the deal at a press conference, SMBC President Masayuki Oku said, "We would like to make another step forward in online financial services" in cooperation with Yahoo Japan, which has some 30 million users.

Yahoo Japan President Masahiro Inoue stressed the significance of the alliance, saying that the online use of money will grow "more than ever."

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Copyright (c) 2006, Kyodo News International, Tokyo

Distributed by Knight Ridder/Tribune Business News.

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Source: Kyodo News International, Tokyo

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