TOKYO -- A new generation of Japanese banks, including the new banking unit of retailer Ito-Yokado Co Ltd, reported interim losses on Nov. 9 due largely to high start-up costs, according to a Reuters report.
Ito-Yokado's IY Bank reported a net loss of 5.7 billion yen in its first six months of operations, with revenues totalling 304 million yen.
The bank, which aims to attract customers by offering 24-hour, low-cost services through a huge ATM network, had installed a total 1,605 machines by the end of September.
Most of the terminals were installed at stores operated by Japan's largest convenience store chain, Seven-Eleven Japan Co Ltd -- a unit of Ito-Yokado.
IY Bank President Takashi Anzai told reporters that his bank's goal is to break even in three years of operation by ensuring each of its IY Bank ATMs is used at least 70 times a day on average. It originally had aimed to turn a profit in two years.
IY's daily ATM usage number currently stands at 20, he said. IY Bank aims to expand the number of ATMs to 3,650 in a year and to 7,150 over five years, with the goal of boosting interchange income, a core revenue source.
IY Bank, which began operations on May 7, said most of its clients use ATMs to withdraw money from their accounts at other banks. Since IY Bank puts more priority on expanding its ATM network and promoting ATM usage, the bank said that it has yet to attract many deposits
Japan's first specialized online bank, Japan Net Bank, posted a net loss of 3.2 billion yen ($26.7 million) in the six months ended Sept. 30, with revenue of 550 million yen.
Two other online banks, Sony Bank and eBank, posted similar losses due largely to the initial costs of starting operations.
Sony Bank, launched in April by electronics giant Sony Corp, scored a net loss of 1.48 billion yen in the past half year, with revenues of 705 million yen.
eBank Corp, which began operations in July as the nation's third online bank, reported a net loss of 688 million yen in the period through September with revenue of 16 million yen.
Japan Net Bank, a unit of Japan's second biggest bank Sumitomo Mitsui Banking Corp., said it has 400,000 online clients, the biggest among the four new banks. It held outstanding deposits of 64 billion yen as of Sept. 30.
Japan Net Bank hopes to gain one million accounts in three years, said Takuya Miyagawa, the bank's assistant manager.
He said competition is welcome, as the entry of two other online banks helped boost the public's awareness of online banking, still in its infancy in Japan.
