Mizuho Eyes 20% Stake In Rakuten Securities For $554-M

Mizuho Financial Group Inc. is considering investing about 80 billion yen ($554 million) to acquire a roughly 20 percent stake in Rakuten Securities Inc., sources familiar with the matter said, Kyodo News reported.

Photo Insert: Mizuho and Rakuten each said they are discussing "various alliance opportunities," but no decision has been made.

The plan comes after Sumitomo Mitsui Financial Group Inc. has invested in internet financial giant SBI Holdings Inc., heating up competition among Japanese megabanks seeking to poach customers through online brokerages.

Mizuho, via its subsidiary Mizuho Securities Co., plans to buy part of Rakuten Securities shares, now totally owned by Rakuten Group Inc., around November, with the financial giant considering sending its executives to the brokerage, Mainichi Japan also reported.

Mizuho and Rakuten each said they are discussing "various alliance opportunities," but no decision has been made. The two are likely to reach an agreement later this week, according to the sources.

Rakuten Securities is one of the most popular online brokerages in Japan, along with SBI Securities Co., with the number of accounts reaching more than 8 million as of June and its assets on deposit exceeding 17 trillion yen as of September.

Mizuho, which takes a more traditional approach and has a competitive advantage in in-person sales, mainly deals with older, wealthier customers.

Mizuho expects Rakuten's younger customers to turn to its securities subsidiary in the future for such needs as managing an inheritance, while the deal enables Rakuten to handle a wider range of financial products, the sources said.

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