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Seven-Eleven bank stumbles to loss on US ATM rollout

Cash machines fail to draw users as well as in Japan

Travelers use a Seven Bank ATM in Tokyo. The bank has a network of over 24,000 cash machines in Japan.

TOKYO -- Seven Bank, part of one of Japan's biggest retail groups, said on Friday it will book 14.6 billion yen ($131 million) in write-downs and slashed its full-year earnings forecast after stumbling in an attempt to duplicate its convenience store ATM network in the U.S.

The unit of Seven & i Holdings now expects a 12.8 billion yen profit for the year ending next March, down from an earlier forecast of 26.8 billion yen. It forecasts a 500 million yen loss for the six months ending Sept. 30.

Seven & i owns both Seven-Eleven Japan -- the country's largest convenience store chain -- and its American forerunner 7-Eleven. Seven Bank installed ATMs at about 8,000 7-Eleven locations starting in fiscal 2017, but usage has reached only about 70% of what it had expected. 

The bank blamed a lack of consumer awareness. Rising U.S. interest rates drove up funding costs, adding to its troubles.

The impairment charges are mainly on goodwill from the buyout of FCTI, its U.S. cash machine unit. An underperforming Indonesian ATM business also contributed to the loss.

In Japan, Seven Bank has a network of over 24,000 ATMs. Found at train stations, shopping centers and other locations besides 24-hour Seven-Eleven stores, they offer cash withdrawals and other services in 12 languages, catering to international visitors to Japan.

Cash remains a leading form of payment in Japan, although digital payment options are rising. Seven & i also issues its own brand of electronic money, nanaco.

Seven & i's financial services generated 49.7 billion yen in operating profit in fiscal 2017, nearly two and a half times as much as 10 years earlier.

Seven Bank's dividend forecast and its medium-term earning goals remain unchanged.

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