Resona Holdings Inc.’s new asset management unit, which opens for business on Sept. 16, expects to be overseeing ¥1.3 trillion by 2021 as households invest more of their savings because of near record-low interest rates.
“There’s been a strong tailwind driving the investment needs of retail customers since the launch of Abenomics,” Akihiro Nishiyama, president of Resona Asset Management Co., said in an interview in Tokyo on Tuesday. He aims to reach ¥120 billion in assets under management in the first 18 months of operation and at least ¥1.3 trillion by the end of March 2021.
Average interest rates on new loans in Japan have been below 1 percent for more than two years, squeezing lending profits and prompting banks to focus on bolstering fee income by selling financial products. Mitsubishi UFJ Financial Group Inc. merged its asset management units in July, and Mizuho Financial Group Inc. announced similar plans in March.
“Resona has many years of experience in fund management for professional investors,” said Nishiyama, 47, who used to manage ¥17 trillion in public and corporate pensions for the group. Careful cost control would enable the company to target Resona’s 13 million account holders with medium to long-term investment products while keeping fees “as low as possible,” he said.
Resona is expanding its scope of business after it completed the repayment in June of a government bailout received during Japan’s bad-loan crisis more than a decade ago. The Tokyo-based bank, Japan’s fifth biggest by market value, forecasts that profit will fall 17 percent to ¥175 billion in the year ending March.
The firm’s first investment product could be on the market as soon as January, according to Nishiyama. He plans to begin customer offerings with an investment trust diversified across domestic and international equities and bonds. Publicly offered investment trusts in Japan totaled ¥101.5 trillion as of July, an increase of 19 percent from a year earlier, Investment Trusts Association data show.
Prime Minister Shinzo Abe took power in December 2012 promising to end years of deflation with a three-pronged strategy of fiscal stimulus, monetary easing and deregulation.