Mizuho to Develop “Smartphone Bank” alongside Chat App Company LINE
Mizuho Financial Group has entered into a joint venture agreement with Line, the struggling tech company behind one of South East Asia’s most popular social messaging apps, to establish a new smartphone-based bank in Japan.
No exact date for the launch of the bank has been announced, but the tentative name for the entity is reported to be “Line Bank Preparatory Company.”
It will have capital and capital reserves of JPY2 billion ($17.5 million), split 51%-49% between Line and Mizuho Bank, respectively. This marks the latest step in Line’s push into the financial sector. The company also operates Line Financial, which provides an investment service (Line Smart Invest) and non-life insurance service (Line Insurance) through its messaging app, “while preparing for other financial services including other securities and loan services”. However, it is looking to accelerate this arm of the business, as its stagnating user numbers threaten to impact revenues from its retail and telecoms business.
For Mizuho, this is an opportunity to leverage Line’s technological prowess and tap into Japan’s “smartphone generation.” According to the two companies, there are over 78 million monthly active users in the country. Japan’s total population is 126.8 million.