Japanese firms rush to join online banking fray

Japanese venture capital firm SBI Holdings and Sumitomo Trust & Banking will launch an Internet bank this month, joining a crowded race to manage Japan's $13 trillion in household financial assets, a Reuters report said.

The Reuters report said the bank, SBI Sumishin Net Bank, will compete with existing online lenders such as electronics firm Sony Bank and unlisted Japan Net Bank, which Sumitomo Mitsui Financial Group controls.

The new bank is also likely to face off with Holland's ING Group , which has said it would bring its ING Direct online bank to Japan by the end of this year, the Reuters report said.

SBI Sumishin will be half owned by SBI and Sumitomo Trust, which will split the initial investment of 20 billion yen ($176 million), the report added.

The Reuters report said the bank would be launched on September 24, pending regulatory approval, and would initially offer services such as deposits, money transfers and housing loans online and via telephone, the two companies said in a statement on Tuesday.

The bank is aiming for about 600,000 accounts and around 1 trillion yen in deposits by its fifth year, the companies said.