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Yomiuri Shimbun file photo Mitsubishi UFJ Financial Group Inc.
The Yomiuri Shimbun
17:08 JST, October 19, 2024
Mitsubishi UFJ Financial Group Inc. (MUFG) and KDDI Corp. have decided to review their capital relationship by separating a jointly owned securities firm and bank, so they each have one wholly owned firm, several sources said.
MUFG will obtain full ownership of au Kabucom Securities Co. and KDDI will fully own au Jibun Bank. The separation will happen at the end of March at the earliest. The aim of the two companies is to concentrate capital in areas they want to strengthen and speed up their management decisions, the sources said.
The move is likely to intensify competition among financial institutions in Japan over individual investors and depositors.
According to the sources, au Financial Holdings Corp., KDDI’s financial holding company, will sell its 49% share in au Kabucom Securities to MUFG, and Mitsubishi UFJ Bank, under the umbrella of MUFG, will sell its 22% share in au Jibun Bank to KDDI.
MUFG and KDDI will continue their business relationship even after the change of the capital relations. They will also consider forming a new partnership in the development and utilization of artificial intelligence in the financial sector.
The sources said au Kabucom Securities will be renamed to include Mitsubishi UFJ and will bolster its retail securities business by strengthening its compatibility with Mitsubishi UFJ cards and other MUFG group services. The number of individuals interested in investing is said to be increasing in light of the start of the new NISA, or Nippon Individual Savings Account — a tax-exempt program for small investments by individuals — in January this year.
In the online securities sector, SBI Securities Co. and Rakuten Securities, Inc., which both have more than 10 million accounts, are popular for their low commission fees for stock trading and their systems rewarding customers with points. SBI Securities has a partnership with Sumitomo Mitsui Financial Group, Inc., and Rakuten has one with Mizuho Financial Group, Inc.
The number of accounts at au Kabucom Securities is only about 1.7 million.
MUFG has a securities company that it jointly owns with the U.S. financial giant Morgan Stanley Inc., but it has been a challenge for the securities firm to attract general customers since it mainly deals with large firms and wealthy individuals.
As of the end of April, au Jibun Bank had more than 6 million accounts thanks to its preferential mortgage rates for customers who use its telecommunications services. KDDI aims to further expand the business, armed with its own large customer base.
SoftBank Corp. and Rakuten Mobile, Inc., two major mobile network operators, both also own a bank within their respective groups. NTT Docomo, Inc. is considering entering the banking business.
These moves suggest domestic banks are focusing their efforts on attracting depositors with the Bank of Japan’s normalization of its monetary policy heralding the arrival of a “world with interest rates.”
