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Japan's online banks struggle to deliver blockbuster IPOs

Low valuations indicate limited excitement for Rakuten and SBI units

Japan's leading online banks, Rakuten Bank and SBI Sumishin Net Bank, have failed to generate the same buzz among investors as their counterparts elsewhere.  (Photo by Ken Kobayashi)

TOKYO -- Two Japanese digital banks are following the footsteps of their regional and global peers by tapping the stock market for the first time. But analysts say they are unlikely to command the eye-popping valuations that investors bestowed on their counterparts elsewhere: Japan's online banks are more like traditional banks than fast-growing tech companies.

E-commerce company Rakuten Group on Sept. 30 said it had begun preparations to list the shares of its banking unit, Rakuten Bank. SBI Sumishin Net Bank, a joint venture between SBI Holdings and Sumitomo Mitsui Trust Bank, quickly followed suit, announcing on Oct. 8 that it had filed an application to go public on the Tokyo Stock Exchange.

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