Mitsubishi UFJ Financial Group Inc.
17:08 JST, October 19, 2024
Mitsubishi UFJ Financial Group Inc. (MUFG) and KDDI Corp. have decided to overhaul their capital relationship by separating a jointly owned securities firm and a bank so that they each have one wholly owned asset, several sources said.
MUFG will acquire full ownership of au Kabucom Securities Co. and KDDI will acquire full ownership of au Jibun Bank. The divorce will not take place until the end of March at the earliest. The aim of the two companies is to concentrate capital in areas they want to strengthen and accelerate their management decisions, the sources said.
This move is likely to intensify competition among financial institutions in Japan over individual investors and savers.
According to the sources, au Financial Holdings Corp., the financial holding company of KDDI, will sell its 49% stake in au Kabucom Securities to MUFG, and Mitsubishi UFJ Bank, under the umbrella of MUFG, will sell its 22% stake in au Jibun Bank to sell. to KDDI.
MUFG and KDDI will continue their business relationship even after the change in capital ratios. They will also consider forming a new partnership for the development and use of artificial intelligence in the financial sector.
The sources said au Kabucom Securities will be renamed Mitsubishi UFJ and will strengthen its retail securities business by strengthening 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 launch of the new NISA, or Nippon Individual Savings Account – a tax-free program for small investments by individuals – in January this year.
In the online securities industry, SBI Securities Co. and Rakuten Securities, Inc., both of which have more than 10 million accounts, popular for their low stock trading commission costs and their systems that reward 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 business that it co-founded with American financial giant Morgan Stanley Inc. assets, but it has been a challenge for the securities firm to attract general clients as it deals mainly with large corporations and wealthy individuals.
At the end of April, au Jibun Bank had more than 6 million accounts thanks to favorable mortgage rates for customers using its telecommunications services. KDDI wants to further expand the company, armed with a large customer base of its own.
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 that domestic banks are focusing their efforts on attracting savers, while the Bank of Japan’s normalization of monetary policy heralds the arrival of an “interest rate world.”
