TOKYO — Daiwa Securities Group plans to begin lending more than 300 million yen ($2 million) for real estate investments in October to strengthen its wealth management business, the Nikkei Shimbun reported.
The group brokers real estate purchases for clients looking to build wealth or plan their estates. However, customers had to go elsewhere to secure funds for their trades.
The group aims to keep the entire process in-house by offering loans through its online banking arm, Daiwa Next Bank.
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Daiwa Next Bank began offering small unsecured loans to individual customers when it opened in 2011, but stopped accepting new loans in 2015. Since then, it has focused on deposits with the Bank of Japan and asset-based lending.
The new move marks the bank’s return to retail lending. We aim to have a balance of several tens of billions of yen within three to five years.
Daiwa Securities positions the wealth management business as an important pillar, and plans to increase pre-tax profits from this business from 35% to 45% of the group’s total in fiscal 2030.
The group aims to increase its income from both fees and interest. Daiwa Securities President Akihiko Ogino said in an interview in May, “In a world of interest rates, banks’ profits will definitely increase.”
The real estate loan market is growing due in part to rising real estate prices. According to the Bank of Japan, the outstanding real estate loans to individual investors amounted to approximately 28 trillion yen as of the end of March, the highest level in three years.
New loans in the January-March period rose 11% from the previous year to 977.8 billion yen, the highest level in six years.
As competition for home loans intensifies, Daiwa’s rivals such as Rakuten Bank, Orix Bank, and Sony Bank are also focusing on real estate investment loans.
