Japanese financial conglomerate SBI Holdings Inc. anticipates a flood of money from yield-starved regional banks that need help reinvesting cash after redeeming government bonds.
A year-old SBI unit that invests on behalf of local banks should see assets at least doubling to ¥300 billion ($2.7 billion) this year, said Tomoya Asakura, an executive at the Tokyo-based group. "We are seeing very strong demand," he said in an interview.
Japan's 100-plus regional banks have been hit by diminishing returns from their domestic securities portfolios after unprecedented monetary easing caused long-term interest rates to tumble. Yields on Japanese government bonds, which used to make up the bulk of their assets, are now negative through 10-year tenors, forcing the lenders to look elsewhere for returns.