Standard & Poor’s said Wednesday that Ito-Yokado Co.’s entry into the banking sector through its newly created subsidiary IY Bank will have no immediate impact on the ratings or outlook of the leading retailer.

The U.S. credit-rating agency cited IY Bank’s moderate investment requirements and limited risks from the venture as reasons for the steady outlook.

Ito-Yokado is assigned the AA-plus long-term rating, the A-1-plus short-term rating and the rating outlook of “stable.”

IY Bank, which started operations Monday, will focus on providing retail settlement services through 24-hour automated teller machines at convenience stores and supermarkets operated by the Ito-Yokado group.

“IY Bank plans to place about 7,150 ATMs over the next five years, but this is unlikely to require large capital investments since the bank will use the extensive store network of Ito-Yokado and its subsidiary, Seven-Eleven Japan Co.,” S&P said.

“IY Bank’s focus on settlement services should limit the risks inherent in the banking business. At the same time, Ito-Yokado’s core retail business could benefit from the larger number of customers attracted by the new banking service,” it said.

S&P said it expects Ito-Yokado’s financial profile to remain conservative, given its restrained financial policy in the past and IY Bank’s moderate investment requirements.

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