The NISA program is so great—I wish we had something like that in Germany, too….
Considering that MUFG and SMFG are saddled with “significant legacy burdens,” their operations are actually going pretty well 😂
Rakuten Securities is actually being held back by its parent company, but Rakuten Bank—which is affected by this—could potentially become more independent in the future (Rakuten currently holds just under 50%).
I think a very relevant competitor you didn’t mention is PayPay. PayPay is a payment platform used by over 70 million Japanese people. The company is part of the SoftBank empire. They also already operate a brokerage firm, though it isn’t that big yet. Nevertheless, PayPay is constantly expanding its banking services and has enormous potential thanks to its massive customer base and powerful owners. SoftBank also operates the country’s third-largest telecommunications group and owns the messaging service LINE, which everyone in the country uses. So, if they want to, they can reach almost every Japanese person. In my opinion, that would be one of the main risks for SBI right now.
But of course, that only applies to the retail business itself. All other financial services behind the scenes (e.g., APIs, VC, etc.) remain attractive, of course. They will certainly continue to perform well. However, the further the NISA program progresses, the fiercer the competition will become in certain areas.
Considering that MUFG and SMFG are saddled with “significant legacy burdens,” their operations are actually going pretty well 😂
Rakuten Securities is actually being held back by its parent company, but Rakuten Bank—which is affected by this—could potentially become more independent in the future (Rakuten currently holds just under 50%).
I think a very relevant competitor you didn’t mention is PayPay. PayPay is a payment platform used by over 70 million Japanese people. The company is part of the SoftBank empire. They also already operate a brokerage firm, though it isn’t that big yet. Nevertheless, PayPay is constantly expanding its banking services and has enormous potential thanks to its massive customer base and powerful owners. SoftBank also operates the country’s third-largest telecommunications group and owns the messaging service LINE, which everyone in the country uses. So, if they want to, they can reach almost every Japanese person. In my opinion, that would be one of the main risks for SBI right now.
But of course, that only applies to the retail business itself. All other financial services behind the scenes (e.g., APIs, VC, etc.) remain attractive, of course. They will certainly continue to perform well. However, the further the NISA program progresses, the fiercer the competition will become in certain areas.
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@PikaPika0105 This is indeed a very important point that should definitely not be underestimated when considering SBI. The enormous reach of PayPay and LINE in everyday Japanese life, in particular, could create competitive pressure in the long term. 👀
With over 70 million users, PayPay naturally has a massive advantage when it comes to customer acquisition. If they succeed in integrating securities trading and NISA savings even more deeply into their existing ecosystem, that could cost SBI a significant share of the market, especially among younger investors and newcomers. After all, the barrier to entry is extremely low.
However, I’d like to make a slight distinction here. I currently see PayPay primarily as a serious competitor in the area of micro-investing and among casual investors. SBI, on the other hand, continues to hold a significantly stronger position when it comes to larger portfolio volumes, long-term wealth accumulation, and active traders. The question is whether PayPay can convert its enormous user base into correspondingly high assets under management in the long term.
There’s also something else we mustn’t forget about SBI. We’re not just talking about a traditional online broker here. Through SBI Shinsei Bank, its investment business, and its various B2B and crypto activities, the company relies on multiple revenue streams. The shift in Japanese interest rates, in particular, could provide additional momentum for the banking business. That’s why, while I would certainly take the increasing competition from PayPay seriously, I wouldn’t automatically view it as a threat.
For me, the greatest risk actually lies in future growth in the retail and NISA businesses. If PayPay were to gain increasing market share there, one would certainly have to take a more critical look at SBI’s long-term growth expectations.
On the other hand, given its broad portfolio and low valuation, SBI still strikes me as an attractive investment. That said, one must of course also question to what extent this valuation discount is justified by the complex corporate structure.
With over 70 million users, PayPay naturally has a massive advantage when it comes to customer acquisition. If they succeed in integrating securities trading and NISA savings even more deeply into their existing ecosystem, that could cost SBI a significant share of the market, especially among younger investors and newcomers. After all, the barrier to entry is extremely low.
However, I’d like to make a slight distinction here. I currently see PayPay primarily as a serious competitor in the area of micro-investing and among casual investors. SBI, on the other hand, continues to hold a significantly stronger position when it comes to larger portfolio volumes, long-term wealth accumulation, and active traders. The question is whether PayPay can convert its enormous user base into correspondingly high assets under management in the long term.
There’s also something else we mustn’t forget about SBI. We’re not just talking about a traditional online broker here. Through SBI Shinsei Bank, its investment business, and its various B2B and crypto activities, the company relies on multiple revenue streams. The shift in Japanese interest rates, in particular, could provide additional momentum for the banking business. That’s why, while I would certainly take the increasing competition from PayPay seriously, I wouldn’t automatically view it as a threat.
For me, the greatest risk actually lies in future growth in the retail and NISA businesses. If PayPay were to gain increasing market share there, one would certainly have to take a more critical look at SBI’s long-term growth expectations.
On the other hand, given its broad portfolio and low valuation, SBI still strikes me as an attractive investment. That said, one must of course also question to what extent this valuation discount is justified by the complex corporate structure.
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•@Aktienhauptmeister I would agree with that
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