Rakuten Bank, Ltd. <5838> extended its sharp decline to hit the daily limit-down, plunging 1,000 yen from the previous session to 5,480 yen. After the close of trading on May 20, Rakuten Bank and Rakuten Group,Inc. <4755> announced that, as part of a fintech business restructuring, Rakuten Bank will make Rakuten Card and Rakuten Securities Holdings?currently Rakuten Group subsidiaries?into wholly owned subsidiaries through a share delivery. In connection with the restructuring, Rakuten Bank plans to ask shareholders at the June 24 meeting to amend its articles of incorporation to raise total authorized shares from 630 million to 1.5 billion, comprising 1.2 billion common shares and 300 million Class A preferred shares. The non-voting Class A preferred shares, which carry rights to be exchanged for common stock, will be issued and delivered to Rakuten Group and Mizuho Bank, a subsidiary of Mizuho Financial Group, Inc. <8411>, effective October 1. The disclosure that Rakuten Bank's simple consolidated earnings per share (EPS) for the fiscal year ending March 2026 would fall to approximately 296 yen from 418.76 yen triggered selling over dilution concerns and deteriorating future supply-demand dynamics.

Concurrently, Mizuho Bank and Rakuten Bank disclosed they have entered into a capital and business alliance. The Class A preferred shares delivered on October 1 will be converted into common shares, giving Mizuho Bank an expected 10.52% voting stake in Rakuten Bank. Rakuten Group will also exercise a portion of its rights, bringing its expected voting stake to 49.95%. Even after the reorganization, Mizuho Financial subsidiary Mizuho Securities will retain a 49% stake in Rakuten Securities, a subsidiary of Rakuten Securities Holdings.

Rakuten Bank forecasts restructuring synergies to boost ordinary income by 33 billion yen or more for the fiscal year ending March 2028, and by 85 billion yen or more annually over the medium to long term. The company targets ordinary income of 400 billion yen or more for the fiscal year ending March 2030, up from 103.091 billion yen for the fiscal year ending March 2026.

Source: MINKABU PRESS

*Translated by generative AI. Click here for the original article.