Sumitomo Mitsui to take 10% stake in SBI Holdings

Sumitomo Mitsui Financial Group has announced that it will acquire a roughly 10 percent stake in Japanese online banking giant SBI Holdings.

The Japanese megabank will invest 79.6 billion yen, or about 590 million dollars, to form a capital and business alliance.That will make Sumitomo Mitsui the largest shareholder in SBI.

The two companies plan to expand their digital securities business.

The deal combines Sumitomo Mitsui's large customer bases at its banking and credit card units with SBI's online brokerage know-how.

The companies say they plan to develop integrated digital financial services for individual customers. They will have a single app for bank transactions, credit card payments, and online securities trading.

It is unusual for a Japanese banking group to form a capital tie-up with a company in another field such as online securities.

It remains to be seen whether such a move could become a trend as financial institutions face lingering low interest rates and other headwinds.