News

Japan's ATM-only IY Bank expects 1st profitable year

October 9, 2003

TOKYO - Japan's ATM-only IY Bank Co on Oct. 9 said it expects profits this business year, reversing an earlier loss forecast.

It expects a net profit of 1.1 billion yen ($10.04 million U.S.) for the year to next March, and expects to have 7,900 ATMs by then, up from 6,500 at the end of September. IY Bank also boosted its target for average ATM use to 66 transactions per day from 55.

It previously forecast a net loss of four billion yen and expected to have 6,800 ATMs by next March, accoirding to a Reuters report.

IY Bank opened for business in May 2001, mainly providing cash accounts and payment services. New banks are required to be profitable by the end of their third year -- this business year for IY Bank -- or face tougher regulatory scrutiny. (See related story Japan's IYBank to begin ATM service May 15)

Most of its revenue comes from fees it charges other banks for their customers' use of its ATMs in Ito-Yokado supermarkets and in convenience stores of Seven-Eleven Japan Co, in which Ito-Yokado owns a majority stake.

The bank has tied up with 291 financial institutions, including big commercial banks, regional banks, consumer financing firms, credit card firms and life insurers. In May it forged a tie-up with post offices, tapping their nationwide network. (See related story Two banks to offer 24/7 ATM access in link with Japan Post)

Customer numbers and deposits at the bank continue to grow, although the pace has slowed somewhat.

At the end of September, IY Bank had 25.7 billion yen in outstanding individual deposits, up 75 percent from the end of March. Its customer base rose 28 percent over the same period, to 138,000 account holders.