Mizuho Financial Group's shares experienced a significant decline of up to 7.7% on Monday following the company's clarification regarding its investment intentions in Rakuten Bank.
This clarification was prompted by a report from Yomiuri Shimbun, which suggested that Mizuho was planning to increase its investment in Rakuten Bank, moving away from its current 14.99% stake in Rakuten Card Co., a subsidiary of Rakuten Group. Mizuho confirmed that while it is exploring various options, including a potential investment in Rakuten Bank, no final decision has been made.
Additionally, Mizuho stated that its 49% stake in Rakuten Securities would remain unchanged. Analysts from Jefferies noted that the fintech segment of Rakuten Group is undergoing a reorganization expected to be completed by October 2026, which could impact the valuation of Rakuten Bank's securities and card segments.
They indicated that Mizuho's involvement could help prevent Rakuten Bank from overpaying for these segments. Despite Mizuho's profit for the fourth quarter increasing by 660% year-over-year to 228.7 billion yen ($1.44 billion), the uncertainty surrounding its investment strategy led to a drop in its share price, while Rakuten Bank's shares rose over 8%.
This situation highlights the market's sensitivity to investment decisions and the ongoing restructuring within Rakuten Group's financial services