Mizuho Bank will shift its investment into a 5.81% stake in Rakuten Bank, according to Japan Today.
The move allows the Japanese lender to strengthen ties with internet banks and expand its customer base.
The bank will withdraw its existing 14.99% stake in Rakuten Card. It will redirect an equivalent amount into Rakuten Bank when the transaction takes effect on 1 October 2026.
The capital alliance comes as Japanese lenders face heightened competition for deposits.
The Bank of Japan ended its decade of unorthodox monetary easing earlier in 2024, prompting traditional banks to seek new deposit channels.
The two companies expect to expand their operational ties. Rakuten may participate in corporate loans originated by Mizuho.
Mizuho could also provide physical counter services for Rakuten Bank customers during natural disasters, addressing the digital lender’s lack of a branch network.
The investment coincides with a major reorganisation of Rakuten Group’s financial operations.
Rakuten will place Rakuten Card and Rakuten Securities Holdings under the Rakuten Bank umbrella in October.
The company plans to integrate its financial application to improve fundraising efficiency and customer convenience.
The newly structured Rakuten Bank group aims to generate recurring profits exceeding 400 billion yen (US$2.5 billion) by March 2030.
Mizuho and Rakuten already share integrated services. The companies launched a joint credit card in 2024 that deducts payments directly from Mizuho Bank accounts.
Mizuho Securities will retain its stake in Rakuten Securities.
Featured image credit: Edited by Fintech News Hong Kong, based on image by Rakuten