UPDATE 2-Japan’s SBI Holdings, Fukushima Bank to form capital tie-up -NHK

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TOKYO (Reuters) – Japanese internet banking giant SBI Holdings Inc (8473.T) and Fukushima Bank Ltd (8562.T) will form a capital and strategic tie-up through an investment of up to 20% by SBI in the regional lender, public broadcaster NHK reported on Monday.

The two financial companies will jointly establish offices where SBI’s products such as investment trust and insurance are provided to Fukushima Bank’s customers, NHK said, adding the companies will also develop new service by using fintech.

The future of Japan’s regional lenders is a focus for investors after years of negative interest rates and a declining population have sapped profits and raised questions about their ability to survive.

SBI’s investment would be around 1 billion yen ($9.2 million), Nikkei quoted Fukushima Bank President Takahiro Kato as saying.

The news sent Fukushima Bank’s shares up to 32.9% higher, their most in almost eight years, while those of SBI Holdings gained 0.9%. The broader market .N225 was little changed.

An SBI Holdings spokesman told Reuters the two companies had been in talks and that an announcement on the discussions would be made after a formal decision is reached at a Fukushima Bank board meeting on Monday.

SBI announced in September it would invest in Shimane Bank Ltd (7150.T), a regional bank in western Japan.

Reporting by Chang-Ran Kim and Takashi Umekawa; editing by Richard Pullin and Aditya Soni

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