ENVALITH
楽天銀行株式会社 logo

Rakuten Bank, Ltd.

5838・Prime Market・Banks

Official website
楽天銀行株式会社 logo
Rakuten Bank, Ltd.5838

Business

Rakuten Bank is an internet-only bank established in 2001, and a listed subsidiary (Tokyo Stock Exchange Prime Market, listed April 2023) in which Rakuten Group, Inc. holds a 49.26% stake. Without physical branches or proprietary ATMs, it provides individual and corporate customers with a broad range of financial services—deposits, loans, remittances, payments, insurance, and securities brokerage—via smartphone apps and PCs. As of the end of March 2026, it had the largest customer base in Japan's internet banking industry, with 18.07 million accounts and deposits of ¥12,964,475 million, and is pursuing a strategy of low-cost customer acquisition and establishing itself as customers' primary bank account by leveraging the Rakuten ecosystem (over 100 million IDs in Japan and overseas). The consolidated group, including its Taiwanese subsidiary and Rakuten Trust, among others, operates Banking as a single segment.

Business Model

Interest income (interest on loans, purchased monetary claims, securities, etc.) accounts for approximately 77% of revenue, while the remaining approximately 20% is composed of fee and commission income (remittance fees, card-related fees, direct debit fees, etc.). The internet-only model, which requires no branches or ATMs, keeps fixed costs low, and approximately 60% of new account openings are acquired at low cost through the Rakuten ecosystem. Through securitization arrangements utilizing the trust functions of Rakuten Trust, the company creates its own investment assets, diversifying its revenue base.

Company Strengths

As of the end of March 2026, the company had 18.07 million accounts and deposits of ¥12,964,475 million, the largest scale in the domestic internet banking industry. The main account ratio reached 32.8% (5,930 thousand main accounts), with steady progress in becoming a everyday bank account through salary transfers and automatic debits. In FY2026 (ending March 2026), the number of settlement transactions was 977 million (up 9.1% year-on-year), indicating firmly established high-frequency usage.

Leveraging Rakuten Group's over 100 million IDs, approximately 60% of new account openings in FY2025 (excluding BaaS-dedicated branches) came through Rakuten Group channels. Through brand licensing, the points program (Happy Program), the Money Bridge linkage with Rakuten Securities, and the banking agency partnership with Rakuten Mobile, the company continues to acquire a large number of new customers while keeping customer acquisition costs low.

Through an in-house development structure in which bank employees control system development, operation, and maintenance, the company has achieved system cost competitiveness that is higher than that of other banks. Leveraging this flexible development capability, the company has provided BaaS (Banking as a Service) to Ogaki Kyoritsu Bank, The Nishi-Nippon City Bank, Dai-ichi Life, and JRE BANK. Total capital expenditure in FY2026 (ending March 2026) was ¥18,893 million, with continued investment in strengthening the system infrastructure and developing new services.

ENVALITH's Perspective

In FY2026 (ending March 2026), interest income increased by ¥69,459 million year on year to ¥197,643 million, accounting for the majority of the ¥71,045 million increase in ordinary income. As an external factor, the Bank of Japan's policy rate hikes pushed up the yield on fund management (full-year 1.23%, up 0.36pt year on year), while an increase in funding costs (¥55,169 million, up ¥28,040 million year on year) has also become apparent due to a rise in the deposit interest rate (full-year 0.29%, up 0.17pt year on year). The overall interest margin expanded to 0.55% (up 0.16pt year on year), indicating that at present the benefits of the rate hikes outweigh the increase in funding costs. ROE improved to 21.7% (18.0% in the previous fiscal year).

In February 2026, a basic agreement was concluded with Rakuten Group, and discussions on a fintech business reorganization aiming at integration with Rakuten Card, Rakuten Securities Holdings, and others were resumed (target effective date: October 2026). While the realization of the integration is expected to optimize funding costs, strengthen data linkage, and improve the agility of decision-making, the policy regarding the involvement of Mizuho Bank (holding 14.99% of Rakuten Card shares) and Mizuho Securities (holding 49.00% of Rakuten Securities shares) remains undecided, leaving uncertainty in the specific form, terms, and schedule of the reorganization. At present, the impact on the consolidated financial statements is stated to be unquantifiable, and investors need to closely monitor the progress of the reorganization.

Total assets expanded sharply, increasing by ¥1,843,500 million year on year to ¥16,592,139 million, while the capital adequacy ratio (notification basis) improved year on year to 10.74% on a consolidated basis and 11.01% on a non-consolidated basis, maintaining capital soundness. However, along with the rapid expansion of loans, the provision for allowance for doubtful accounts increased to ¥4,022 million (up ¥838 million year on year), and the balance of non-performing loans increased to ¥7,590 million (up ¥3,166 million year on year), showing an upward trend. Total credit-related costs (non-consolidated) amounted to ¥4,958 million (up ¥1,611 million year on year), and depending on future economic conditions and the interest rate environment, there is a risk that a further rise in credit costs could put pressure on earnings.

Growth Strategy

Comprehensive financial platform strategy through deepening lifestyle-account adoption, diversifying investment assets, and restructuring fintech businesses

Promoting the transformation of accounts into everyday infrastructure through expansion of the bonus interest rate program (additional interest on ordinary deposits linked to salary/bonus/pension receipt, debit card usage, automatic account transfers, etc.), a banking agency partnership with Rakuten Mobile (starting January 2026), and the launch of smartphone ATM services (December 2025). Aims to achieve stable expansion of fee and commission income.

In addition to investment condominium loans, tie-up loans, and card loans, the company has introduced new products such as securities-backed loans (launched June 2025, exceeded ¥10 billion in balance in October of the same year) and reverse mortgages (revolving type, launched May 2025), diversifying the loan portfolio. Continued accumulation of securities (government-guaranteed bonds, corporate bonds, foreign bonds, etc.) is also underway to improve the profitability of overall investment assets.

Aiming for organizational restructuring to consolidate Rakuten Card, Rakuten Securities Holdings, and other entities into a single group, a basic agreement was signed in February 2026. Through optimization of funding costs, enhanced data linkage and AI utilization, and improved agility in decision-making, the company seeks to accelerate growth as a comprehensive fintech company. Effectiveness is targeted for October 2026, though this may be subject to change depending on regulatory approvals and licensing from supervisory authorities.

From January 2026, the balance eligible for the maximum preferential interest rate on ordinary deposits for Money Bridge registrants was raised from ¥3 million to ¥10 million. This captures the asset management needs of Rakuten Securities users, aiming to increase deposit balances and enhance customer engagement.

Last updated: July 19, 2026