Sony Corp. has filed for permission to open an online bank in Japan. Sony Bank Corp. is set to open in mid-June with about 80 employees. Sony will own 80% of the bank, Sakura Bank will control 16%, and J.P. Morgan Chase will have a 4% stake. The three will initially invest a combined $322 million in the venture.
In a statement, Sony said the bank will "exploit the special merits of the Internet" and target individual customers rather than institutions. The bank won't have physical outlets, but customers will be able to use ATMs at stores and branches of Sakura Bank. It will initially offer personal accounts, trusts, and payment services, but plans within a year to add foreign-currency deposits, credit cards, and home loans. Sony says the bank will turn a profit in three years, with 400,000 accounts and deposits totaling $5.2 billion. In five years, the company is projecting deposits of $8.6 billion and 600,000 accounts.
"They have been hinting and working on an online bank for about a year," says Paul Jamieson, an analyst with Gomez Advisors. He says banking is a natural extension of Sony's business. While the company is known primarily for consumer electronics in the United States, it has a much broader stance in Japan, Jamieson says, and already has financial services businesses such as insurance and brokering.
"People are getting more and more used to consumer brands extended into other areas," Jamieson says. He points out that General Motors has had some success with online banking and credit-card businesses in the United States, and says it probably won't be long until Sony expands its banking business into other markets. "The clue to them doing so is the tie-in with J.P. Morgan," Jamieson says. "I imagine that J.P. Morgan has an idea that this thing is going to be bigger than just an online bank."