Okasan Securities Group - Company History

In April 1923 Kato Seiji opened Okasan Shoten in an eight-mat room of a former inn in Kyoguchi-cho, Tsu, in Mie Prefecture. The name was a ledger of obligations: Oka for the backer, Mr. Okazoe, who had put up the money, and san — three — for the three Kato brothers who were to run it together. The firm took the Kato family crest, a bull’s-eye, as its company mark.

From that single room it spread by branches — Yamada in 1926, then Matsusaka and Yokkaichi — and in 1941 it passed Meihan Shoten of Yokkaichi in trading volume to become the largest broker in Mie. The title lasted three years. In 1944 wartime industrial consolidation reached the securities trade, and the forty-eight brokerage offices in the prefecture were compressed into seven, run by six firms. Okasan was one of the survivors, but it survived by merging: on 25 August 1944 it combined with Hashimoto Shoten of Ujiyamada and incorporated as Okasan Securities Co., Ltd. with capital of ¥180,000.

Incorporation, in other words, was not a step taken to match growth; it was what being consolidated looked like from the inside. Kato Seiji stayed on as president, the head office remained in Tsu, and the business stayed local. When the postwar securities regime was rebuilt around a new Securities and Exchange Act, Okasan registered under it in July 1948 and carried on.

Open a new branch and you must find every customer from scratch; buy another broker’s business and the office and the customers come together. In October 1949 Okasan moved its head office from Tsu to Kitahama in Osaka, the centre of Kansai share dealing, and that December absorbed Suzuki Securities of Osaka. It was the first use of the method that would define the next two decades. Through the 1950s the firm took over the businesses of Yoshimura Securities in Tokyo (1956), Nakaya Securities in Kyoto (1958), Koryu Securities in Hiroshima (1959) and Sanpo Securities in Kobe (1961) — small local houses in every case, inherited whole.

Capital rose with the branch count: the company incorporated at ¥180,000 in 1944 reached $4.2M (¥2bn) by April 1961, when it also reorganised and placed its head-office functions in Tokyo. That May, Kato Seiji received the Medal with Blue Ribbon for his service to the industry; in June he died. His eldest son Kato Seiichi, then thirty-two, took over a company caught halfway between a provincial shop and a national broker.

The timing was brutal. The Tokyo market peaked in July 1961 and slid to less than half its level by mid-1965; a flood of new equity issues broke the market’s absorptive capacity, and Japan’s securities houses posted aggregate losses in both 1964 and 1965. The crisis that ended in emergency Bank of Japan lending to Yamaichi Securities rewrote the rules of the trade: from April 1968 broking moved from registration to licensing, and the thinly capitalised were culled. Okasan took its licence that same month — and what qualified it to pass through the sieve was precisely the branch network and customer base it had bought a decade earlier. In October 1965 it had completed its own building in Tokyo’s Nihonbashi and moved the head office there from Osaka, the second relocation in sixteen years. On 1 June 1973 the shares were listed on the second sections of the Tokyo and Osaka exchanges under the code 8609, with forty offices, 1,571 staff — and 71.1% of revenue coming from brokerage commissions.

The listed Okasan spent the 1980s hiving off its peripheral functions into subsidiaries — information services in 1980, the research department as Okasan Economic Research Institute in 1981, asset management in 1984, back-office work in 1996, with a Hong Kong arm from 1976. The pattern of holding each function in its own legal entity would become the blueprint for the holding company two decades later. What did not change was the earning engine. So long as the whole market rose, a broker could recommend a spread of names, lose money on one and still show the client a gain; the skill of any individual pick never had to be tested. Okasan’s revenue stayed where it had been at listing — mostly commissions from retail clients.

When prices turned, the distortion surfaced as loss compensation and hard selling. Okasan’s compensation payments came to about ¥500 million, trivial beside the tens of billions at the largest houses, but the trouble kept coming: in March 1993 a serving managing director was summoned before an Upper House budget committee over the tax-evasion case of former LDP vice-president Shin Kanemaru, and that May a former branch sales manager who had lost client money disappeared. Revenue for the year to March 1993 fell 32.3% to $324.7M (¥36bn), and the ordinary loss reached $165.5M (¥18bn) — a third straight year of falling sales and profits.

With every reason to cut heads, Okasan instead extended new-hire training from two weeks to a full year — the longest in Japanese finance, against two months at Nomura and about four at Daiwa — pulling seventy-one graduates off the floor for twelve months. Managing director Kato Tetsuo, who pushed the plan through a hostile board, became president in 1997 when Kato Seiichi moved up to chairman and, from 1998, to the chairmanship of the Japan Securities Dealers Association. Asked in 1999 to describe his own firm, Kato Seiichi called it “one corner of the second tier,” and admitted that the retail, region-focused positioning Okasan had flown for a decade was by then “no longer much of a distinction.” In October 1999 brokerage commissions were fully deregulated, and the structure that had supplied seven-tenths of revenue ceased to be a given.

In October 2003 Okasan Securities split its operating business into a new company and turned itself into a pure holding company, Okasan Holdings — renamed Okasan Securities Group in 2008. Under that structure it became a consolidator of Japan’s shrinking regional brokers, taking in Sanko Securities, San-en Securities, Marufuku (renamed Okasan Niigata Securities) and, in 2021, Securities Japan. Unlike the 1950s, it no longer swallowed these firms whole; it held them as subsidiaries. In 2008 it also ran the logic backwards, folding the research institute it had spun out in 1981 back into the broker.

The commission-free era demanded a different answer. Around 2000 an online broker with roughly 160 staff was earning much the same ordinary profit as a second-tier house with 1,200 — a discrepancy no full-service firm could out-price. In January 2006 the group set up Okasan Online Securities as a separate company, keeping the cheap channel legally apart from the branch network. Sixteen years later, in January 2022, Okasan Securities absorbed it: the price advantage had never arrived, and only the duplicated systems and overheads remained. In 2014 Shinshiba Hiroyuki had become president, ending fifty-three years of Kato-family leadership.

What the group is building now is less a brokerage than a supplier to other brokerages. It calls the idea a securities platform: providing trading, custody and product infrastructure to affiliated brokers, independent financial advisers and regional banks. Okasan BANK, launched in September 2024 on another institution’s banking licence, gathered more than ¥70 billion in deposits, of which some 92% stayed inside the group at maturity. In 2026 Okasan agreed to hand part of the online business to SBI Securities and to merge Securities Japan with its technology arm into a platform-only broker. Client assets reached ¥10.1 trillion across 1.1 million accounts at March 2026, and net profit hit a record — yet the goal management states is still the old one: shift the weight from transaction fees to recurring, asset-based revenue, and finally undo the 71.1% of 1973.