TOKYO -- Daiwa Securities Group and Japanese credit card company Credit Saison will enter a capital and business tie-up, partnering in such areas as mobile payment services as they work to solidify their customer bases.
Under the plan announced Thursday, Japan's second-largest brokerage group will acquire as much as 5% of Credit Saison for an estimated 9 billion yen ($84.7 million), which would make Daiwa its largest shareholder outside of institutional investors.
Credit Saison will buy up to 2 billion yen worth of Daiwa shares, equivalent to a roughly 0.3% stake.
The companies look to leverage their complementary customer networks -- Daiwa's clients tend to skew older and more affluent, while Credit Saison has a large base of younger cardholders.
For Daiwa, which had roughly 64 trillion yen in assets under management as of June, the partnership also offers the prospect of feeding Credit Saison's trove of customer data into its own development of financial services.
Capital ties between brokerages and credit card companies are rare in Japan. But diverse tie-ups are now cropping up around the finance sector to deal with competition from outsiders moving into mobile payments, such as chat app provider Line.
Credit Saison is a major player in Japan's credit card market, holding a roughly 10% share. It grew in the 1980s under railroad empire heir Seiji Tsutsumi's Saison Group, benefiting from ties with Seibu Department Stores and other retailers, and still has a strong presence in store-issued cards.
But questions had arisen over the credit card company's growth prospects. Longtime President Hiroshi Rinno, who had overseen its expansion abroad and the introduction of a rewards program featuring permanent points, stepped down from the role this year, though he remains CEO and now serves as chairman.
Credit Saison is a major lender for real estate investment and may be looking to market property deals as a tax-saving option to Daiwa's wealthy clients.
Both Credit Saison and Daiwa had once built deep relationships with banks.
Credit Saison formed an alliance in 2004 with Mizuho Financial Group, which remained its largest shareholder until fiscal 2014. The partnership had focused on credit cards, but the pair decided earlier this year to dissolve the alliance this October.
Daiwa entered a tie-up in July 1998 with Sumitomo Bank, now Sumitomo Mitsui Banking Corp., and the two set up a joint venture focusing on corporate customers. A rift between the two led to the partnership ending in 2009.