Major supermarket chain Aeon Co. said Friday it will enter the banking business as early as spring 2007, building on its 1,500 stores and 13.7 million Aeon credit card holders in Japan.
The decision to obtain the license for full retail banking came at the day's board meeting, it said.
The company will set up a preparatory firm in April to create the bank, tentatively named Aeon Bank, it said.
By its fifth year, Aeon said it expects the bank to have more than 3 million accounts, more than 2,000 automated teller machines, over 60 in-store branches and over 650 billion yen in deposits. The return on equity is projected at more than 20 percent.
In a bid to meet shoppers' requests for financial services, the bank will provide a full range of diversified financial services, ranging from small-lot settlements and deposit acceptance to lending, and insurance and securities sales, according to Aeon officials.
Aeon will be the second major Japanese retailer to enter the banking business, after Seven & I Holdings Co. The latter has been successful in generating proceeds from its financial services at its Seven-Eleven convenience stores and other Seven & I outlets.
In addition to Aeon, some of its affiliates, including Aeon Credit Service Co. and convenience store chain Ministop Co., are expected to invest in the new bank.
Aeon is expected to tap Mizuho Financial Group Inc., its main bank, for personnel and technical help.