Investing in Rakuten Securities: face-to-face meets online (2022)

Partnering halfway, without taking control

The heart of this decision was that a megabank’s securities arm, whose strength had lain in face-to-face sales, used capital to step inside the online broker it competed with head-on. For a Mizuho that had damaged retail trust in the 2021 system failures, riding on Rakuten Securities’ finished customer base for $609M (¥80bn) was faster than fencing in a young, wealth-building generation from scratch. A Rakuten that wanted cash to cover losses in its mobile business, and a Mizuho that wanted to make up for its weakness online — this investment stands where the two sides’ needs meshed.

Even so, Mizuho stopped at 49% rather than taking a majority. Making it a subsidiary would have weighed it down with the heavier regulation of a bank affiliate and could have damaged the Rakuten name and its freedom to run itself. In choosing not control but a partnership in which two firms stand side by side, the design behind this investment shows through. As personal asset management shifts online and the new NISA swells the flow of individual money, whether this attempt — a face-to-face bank and an online broker clasping hands halfway — bears fruit will be confirmed, from here on, in the numbers.