Yahoo Japan Corp will ally with Sumitomo Mitsui Financial Group (SMFG) in online banking by taking a stake in the lender's Internet subsidiary Japan Net Bank, the companies said on March 30.
Yahoo said it would acquire 14.9 percent of a new holding company for Japan Net Bank for an undisclosed sum. SMFG's core commercial banking unit will transfer its 57 percent stake in Japan Net Bank to the holding company, which is to be set up by September.
The tie-up will expand access to settlement and other banking services for users of Yahoo's popular shopping and auction services. The move comes after a tentative alliance between Japan's biggest Internet portal and another lender, Aozora Bank, fell apart last month.
In a statement, Yahoo and SMFG said Japan Net Bank would raise 30-40 billion yen ($255-$340 million) in fresh capital by the end of this year. Yahoo said it may eventually raise its stake in the holding company to as much as 50 percent.
The rapid spread of broadband Internet access in Japan has paved the way for a raft of online banking ventures in recent years, with traditional banks, Internet providers and even manufacturers such as Sony Corp taking deposits online.
Japan Net Bank, which posted net profits of 1.13 billion yen ($9.6 million) last year, competes with larger virtual lenders such as Sony Bank and Seven Bank, a unit of 7-Eleven convenience store operator Seven & I Holdings Co.
Yahoo had been looking for a new banking partner since its alliance with Aozora collapsed. Yahoo and Aozora announced an online banking tie-up early last year, but differences over the venture's business model and the timing of its launch eventually scuttled the deal.
Shares in Yahoo Japan ended down 0.56 percent at 70,700 yen after jumping 7.56 percent on Wednesday on news reports of the deal. Sumitomo Mitsui ended up 3.2 percent at 1.29 million yen, while the benchmark Nikkei stock average rose 0.63 percent.
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