TOKYO: Japanese bank Resona Holdings Inc.’s new asset management unit, which opens for business on Sept. 16, expects to be overseeing 1.3 trillion yen ($10.8 billion) 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 yen in assets under management in the first 18 months of operation and at least 1.3 trillion yen 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 yen 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 in June it completed the repayment 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 profit will fall 17 percent to 175 billion yen in the year ending March.
