TOKYO -- Daiwa Securities Group in October will start providing loans for real estate investments of 300 million yen ($2 million) or more in an effort to bolster its wealth management operations, Nikkei has learned.
The group brokers real estate purchases for clients who are looking to build their wealth or plan their estates. But clients have needed to go elsewhere to secure financing for the deals.
By offering loans through online banking unit Daiwa Next Bank, the group aims to keep the entire process in-house.
Daiwa Next Bank began offering small unsecured loans to retail customers when it launched in 2011, but stopped taking new applications in 2015. It has since focused on deposits with the Bank of Japan and on asset-based lending.
The new move marks the bank's return to retail lending. The goal is to achieve a balance in the tens of billions of yen within three to five years.
Daiwa Securities positions wealth management as a key pillar, with plans to boost pretax profit from the business from 35% to 45% of the groupwide total in fiscal 2030.
The group aims to boost income from both fees and interest. "Banking profits will definitely increase in a world with interest rates," said Daiwa Securities CEO Akihiko Ogino in a May interview.
The market for real estate loans is growing, driven partly by rising property prices. The outstanding balance of real estate loans to retail investors stood at around 28 trillion yen as of the end of March, reaching a more than three-year high, according to the Bank of Japan.
New lending increased 11% on the year to a six-year high of 977.8 billion yen in January-March.
With competition on mortgages heating up, Daiwa rivals like Rakuten Bank, Orix Bank and Sony Bank are also focusing more on loans for property investments.
