Orix Bank hopes to entice wealthy, households to take out more loans

Bloomberg

Orix Corp., a major financial services conglomerate active in fields from leasing to insurance, aims to expand loans at its banking unit by ¥150 billion next fiscal year on demand from households and wealthy clients.

Orix Bank Corp. targets 18 percent growth in lending for the year starting in April from ¥814 billion last March, Akio Ushio, president of the unit, said in a recent interview. The bank introduced a loan card on March 1 and began a private banking service to lure clients with assets exceeding ¥100 million.

Having entered the banking business in 1993 focusing on mortgages, Orix is seeking to diversify by attracting retail customers seeking fast credit at outlets including automatic teller machines. A government clampdown that restricted lending to consumers by nonbanks has opened up a gap in the market that the firm can fill, Ushio said.

“As a bank, we’re confident our consumer loans will grow steeply after Japanese moneylenders reduced their market share on tighter regulations,” Ushio said at the company’s Tokyo headquarters last week. “Even with those regulations, the country has big potential for growth in quick-money lending.”

Through its card, Orix aims to up consumer loans by ¥100 billion in the next three years, Ushio said. The bank has more than doubled corporate loans in the past three years to ¥180 billion by focusing on midsize service industry firms such as realtors, he said.

Acom Co. and Promise Co. are among consumer finance firms that had to reduce interest rates to 20 percent from as much as 29 percent and cap lending to low-income borrowers.