GMO and Aozora Bank Disclose Share Transfer for Joint Venture Internet Bank

GMO Click and Aozora Bank intend to launch the joint venture Internet bank in the Fiscal Year 2017.

GMO CLICK Holdings, Inc. (TYO:7177) has executed a share transfer agreement with GMO Internet, Inc. (TSE1:9449), acquiring a portion of the GMO’s Aozora Trust common shares. The step comes in the context of the initial alliance announced last June between GMO Internet, Inc. Aozora Bank, Ltd. (TYO:8304) and Aozora Trust Bank, Ltd regarding the joint establishment of an internet bank, according to an official statement.

GMO Internet Group, headquartered in Tokyo, is a comprehensive internet services group operating in many business segments including online advertising and media, internet infrastructure, internet securities and mobile entertainment. GMO CLICK HD and GMO CLICK Securities are the brokerage arms of the Japanese giant which provide securities, FX, CFDs and other financial instruments, primarily to retail investors. GMO CLICK Securities is the world’s largest FX provider by trading volume, having retained this position for several years since 2012.

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As fintech has been attracting considerable attention in the financial industry, the new business is set to leverage Aozora Bank’s extensive banking experience and GMO Internet’s track record in e-commerce and internet securities, to jointly operate a next-generation internet bank which responds to the changing needs of customers.

To ensure the smooth operation of the new joint venture, the Internet banking business will be jointly operated under Aozora’s wholly-owned subsidiary, Aozora Trust. The parties have also executed a succession of contractual status agreement, amending the June 24th 2016 shareholders’ agreement between Aozora and GMO Internet to include GMO CLICK HD.

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Alliance Details

By including GMO CLICK HD, the new initiative will take full advantage of the company’s know-how in securities business in order to enhance the internet bank, as well as collaborating with GMO CLICK Securities, Inc. to offer services integrating banking and securities. Through this planned partnership, the joint venture will ensure timely development of unique services at a significantly reduced cost through partnerships with fintech companies.

In accordance with the agreements under the alliance, including the shareholders’ agreement, GMO will transfer to GMO CLICK HD 10,290 shares of the 20,580 common shares acquired from Aozora Trust’s 6.6-billion-yen capital increase, which was implemented through a third party allocation of new shares on June 29, 2016.

In addition, the succession of contractual status agreement provides for the transfer to GMO Internet and/or GMO CLICK HD of all Class A and Class B shares acquired by Aozora on either the date on which the GMO group companies obtain necessary authorization from the relevant authority to become a major shareholder of Aozora Trust, or 5 years from the official launch date of the internet bank, whichever comes first. Furthermore, subject to obtaining the aforementioned authorization from the relevant authority, GMO Internet may convert any class shares acquired to common shares.

While the partners aim to commence operations during FY2017, the cost estimated for Aozora Trust to launch the internet banking operations is around 5.5 billion yen.

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