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Marking our 25th anniversary and looking ahead to the next stage

＜Celebrating our 25th anniversary＞

This year marks Rakuten Bank’s 25th anniversary since operations commenced in July 2001. Our journey began with the challenge of launching a completely new business model at the time—an internet-only bank—and over the past quarter century, we have continued to grow with the support of many customers. I am deeply grateful for everyone’s continued trust and support.
In those early days, the experience of opening a bank account and completing transfers entirely online was unfamiliar to many people. Today, however, our number of accounts has exceeded 18 million, and Rakuten Bank has become widely recognized as a synonym for “digital bank.” The customer base, technological foundation, and brand that we have built over the past 25 years are our greatest assets.
The milestone of our 25th anniversary is not only a time to look back on the past but also a new starting point for the next 25 years. The shift toward a “world with interest rates”, advances in cashless payments, and the rapid evolution of AI and other technologies are all major waves of change that will catapult Rakuten Bank to the next stage. With the spirit of innovation that we have carried since our founding, we promise to continue honing our strengths as a digital bank and to remain a bank that makes the lives of our customers more convenient and fulfilling.

＜My first year in office＞

In fiscal 2025, we smashed our previous record for consolidated ordinary profit by reporting 103 billion yen. We also hit our consolidated ordinary income target of approximately 200 billion yen, which was set for the fiscal year ending March 31, 2027 in the Medium- to Long-term Vision, one year ahead of schedule. This achievement is the result of the support of all our stakeholders and the dedication of each and every one of our employees, for which I would like to express my gratitude once again.

A world with interest rates is now fully upon us, and the environment surrounding bank management is on the verge of a major turning point. While higher interest rates create earnings opportunities, they are also bringing changes to the financial behavior of customers. As depositors become more sensitive to interest rates and funds are moved elsewhere in search of better returns, the shift from savings to investment is accelerating, intensifying competition for deposit acquisition even further. In addition, while megabanks are entering the digital banking space in earnest, the major telecommunications carriers are also placing financial service companies under their umbrella to build and expand their own ecosystems in a bid to step up their customer retention strategies. As a result, the structure of competition itself is changing.

These environmental changes mean that elements such as digital channels and convenience are becoming commoditized. At the same time, they present an excellent opportunity for us to further differentiate ourselves because we possess a formidable customer base in the shape of the Rakuten Ecosystem, as well as data utilization capabilities. It is my responsibility as a corporate manager not to be complacent with our currently brisk earnings, but to face these changes head-on and lay the foundation for our next stage of growth.

This past year has also been a time to reexamine what kind of management is required to continue winning in a competitive environment. What I focused on was maintaining an attitude of not being bound by past successes. We have long led the industry as a pioneer in digital banking, but with the competitive landscape evolving rapidly, past successes no longer guarantee future results. The fact that we have positioned marketing, AI and technology, and human capital as key areas and have implemented specific measures in each of them is based on this understanding. We intend to steadily nurture the seeds we have sown over the past year and move forward toward our next stage of growth.

Marketing

Given the strong sense of crisis around the fact that extensions of previous initiatives would not be enough to address the changing competitive environment, my first step as a President was to transform our marketing organization.

We positioned the promotion of cross-selling through synergies and collaboration with the Rakuten Group, the active utilization of AI, and the enhancement of marketing through more personalized advertising and service offerings as key measures to accelerate growth. To aggressively drive these initiatives forward, we established the Marketing Division to take charge of data-driven marketing that fully leverages Rakuten memberships. We also restructured and expanded our sales organization to strengthen transactions with clients across the Rakuten Group. As a result, the number of main accounts reached 5.9 million at the end of fiscal 2025, which demonstrates that our relationships with customers are steadily deepening.

Also, to strengthen our deposit acquisition strategy, we worked to enhance the app’s user interface (UI) and user experience(UX). For example, in the Rakuten Bank app, we added a space that shows the bonus interest rate program so as to raise awareness of preferential rates, and in the Rakuten Card app, we added a feature to show ordinary deposit balances in yen to encourage Rakuten Card users to open accounts at Rakuten Bank. Providing a seamless customer experience through close collaboration with Rakuten Group services exemplifies our competitive advantage.

AI and technology

The use of technology is at the core of our business operations as a digital bank. In fiscal 2025, we significantly expanded how we use AI.

In addition to refining customer segmentation in our advertising business, we have been advancing the use of AI in the screening process for card loans in an effort to improve both screening accuracy and processing speed while balancing transaction volume growth with default risk reduction. We are also utilizing AI to enhance the accuracy of detecting card fraud while simultaneously improving operational efficiency. Furthermore, by using generative AI to assist with coding and SQL creation, we have achieved greater efficiency in systems development and operations. Another new initiative was the use of an AI avatar of myself to present an overview of our earnings at our financial results briefings.

As for our framework around AI, we established the AI Promotion Committee to set priorities and manage progress on the company-wide use of AI. Investment in technology is not just a means to reduce costs, but a growth investment geared towards enhancing the value we deliver to customers and continuously strengthening our competitiveness. Going forward, we will continue with efforts to make our unique digital strengths accessible to an even broader customer base.

Human capital

Even as AI continues to advance and become more pervasive, the root source of our competitiveness will ultimately remain our people. To become an organization where all employees work together to pursue our goal of being a “safe, secure and most convenient bank” and, beyond that, “the world’s best digital bank”, I believe that a spirit of mutual trust and mutual responsibility is essential. Since becoming President, I have been consistently communicating this message to the entire company. At the same time, we have pressed ahead with initiatives to create an environment where our diverse pool of human resources can work with peace of mind, a framework that enables each individual to take pride in their work and achieve self-fulfillment, and an open corporate culture to invigorate communication among each other.

We have actively recruited individuals with a wide range of expertise, including data science, risk management, and digital marketing. To attract and retain talented personnel capable of driving sustained growth in a rapidly changing business environment and in the midst of intensifying competition for talent, we raised the starting salaries for new graduates. By leveraging the Rakuten Group’s global personnel network, we are building a human resources foundation that combines the expertise of a bank with the agility of a digital company.

In addition to improving various training programs to develop the personnel required of a digital bank and providing opportunities for employees to seize the initiative in developing their own skills and building a career, we have revised our evaluation system. By emphasizing competency-based evaluations that value the process of achieving goals, we aim to help employees develop a stronger connection between the organization’s objectives and their own roles, thereby enabling them to consistently fulfill expected responsibilities and grow together with the company. Furthermore, we are committed to creating an environment where each employee can maintain a high level of motivation and engagement to take on challenges with confidence, realize personal growth, and proactively shape their own careers.

＜Stronger governance＞

Building a highly effective governance framework is indispensable to achieving sustained improvement in corporate value. I am cognizant of the fact that as a corporate manager, it is my important responsibility not only to improve business performance but also to ensure effective governance and earn the trust of all stakeholders.

At the Annual General Shareholders' Meeting held in June, we welcomed three new directors and two new auditors We newly appointed two outside directors: Mr. Satoshi Kawai, who possesses extensive knowledge and experience as a lawyer, and Ms. Mari Kogiso, who brings not only financial institution experience, but also broad-ranging expertise as an entrepreneur and corporate executive, as well as experience in key roles within global organizations. As a result, the number of outside directors increased from three to four, further enhancing the independent perspectives and supervisory functions of the Board of Directors. As for the Audit and Supervisory Board members, Mr. Jun Ikeda, who has held key positions in financial administration, was newly appointed as a full-time Audit and Supervisory Board member, and Ms. Kiyoko Ohora, who possesses extensive experience working at a credit rating agency, was newly appointed as an outside Audit and Supervisory Board member.

This reinforcement of governance is not merely an increase in personnel. By incorporating diverse expertise into the Board of Directors and the Audit and Supervisory Board, we aim to enhance the quality of management decision making and the effectiveness of supervisory functions. We will continue to strengthen our governance framework to further enhance the objectivity and transparency of decision making while ensuring that we can respond to changes swiftly.

＜FinTech business reorganization＞

At the AGM, we obtained the approval of shareholders for the reorganization of the FinTech business to make Rakuten Card Co., Ltd. and Rakuten Securities Holdings, Inc. our subsidiaries. We are steadily pressing ahead with the integration process toward an effective date of October 1, 2026.

The strategic significance of this reorganization, in short, lies in unifying the Rakuten Group’s financial functions under a single purpose to build a structure that enables us to deliver greater value to our customers. We have long worked to expand our customer base, enhance profitability, and drive growth in the FinTech field, with the aim of becoming a leading company in Japan’s financial market. However, with changes in the operating environment accelerating, we determined that further strengthening collaboration among banking, card, and securities businesses to enable more agile management decisions and deeper business integration would contribute to our sustained growth and enhancement of corporate value.

By adding both Rakuten Card, which has approximately 33 million cards issued and about 27 trillion yen in shopping gross transaction volume, and Rakuten Securities, which has approximately 14 million accounts and about 50 trillion yen in assets under custody, the Rakuten Bank Group will expand into a integrated FinTech company like no other.

Until now, the banking, card, and securities businesses have operated independently; however, the financial needs of our customers are seamlessly connected across payroll, daily payments, asset building, and borrowing. By operating banking, card, and securities businesses as one, we will be able to maximize the touchpoints with the customer base of over 100 million memberships held by the Rakuten Group and provide seamless financial experiences across all aspects of our customers’ lives. This represents the creation of customer value that could not have been achieved on our own.

From a management standpoint, we take the decline in our share price following the announcement of the final agreement on this reorganization seriously. This decision, however, is not based on a short-term perspective but on our firm belief that this reorganization is necessary for us to maintain the competitiveness and achieve sustained growth going forward. Through this reorganization, we expect to generate annual synergies of approximately 33 billion yen in the fiscal year ending March 2028 and 85 billion yen or more annually in the medium term. In addition, we expect to see further upside from synergies that cannot yet be quantified, such as growth in our corporate customer base and benefits derived from the use of data and AI, which are anticipated to gradually expand. By accumulating synergies on top of the ordinary profit growth achievable by each company on its own, we are targeting an ordinary profit of 400 billion yen or more in the fiscal year ending March 2030.

As this reorganization involves transactions with our parent company, Rakuten Group, Inc., we have implemented measures to avoid conflicts of interest, in line with the principles of the Fair M&A Guidelines published by the Ministry of Economy, Trade and Industry. Mr. Mikitani, chairman of the Board of Directors and also a Representative Director of Rakuten Group Inc., and I, who served as Managing Executive Officer of Rakuten Group, Inc. until March 2025, did not participate in the deliberations or resolutions of the Board regarding this reorganization. Furthermore, we established the Special Committee consisting of independent outside directors and others, which convened a total of 18 times between February and May 2026, and, with the involvement of external experts, engaged in extensive discussions from multiple independent perspectives. The share delivery ratio was agreed upon after comprehensive consideration of valuation results prepared by multiple financial advisors and the Special Committee’s third-party valuation agent, fairness opinions, due diligence results, and the opinions provided by the Special Committee. I believe that the rigorous implementation of these processes ensures the fairness of this reorganization.

After the reorganization takes effect, our top priority will be to steadily advance the integration process to realize synergies. We will gradually deepen the integrated operations of the banking, card, and securities businesses while giving tangible shape to those synergies.

＜To our stakeholders＞

As we mark our 25th anniversary, we reaffirm our deep sense of gratitude and responsibility for being chosen by more than 18 million customers. Continuing to live up to this level of trust from our customers is the starting point of our management decisions.

By further refining our strengths as a digital bank and continuing to invest in technology and personnel, we aim to remain a presence that meets the financial service needs of customers in every aspect of their lives—this is the vision I have consistently pursued since assuming my position. We recognize that our greatest responsibility to our stakeholders is to demonstrate the results of these ongoing efforts in the shape of sustained improvement in corporate value.

The next 25 years will be an era in which the integration of digital technology and finance advances even further, transforming not only the lives of our customers, but also the very structure of society itself. I believe that remaining at the forefront of this transformation is Rakuten Bank’s reason for existence. We will continue to transform Rakuten Bank into an even stronger and more valuable institution while sincerely meeting the expectations of all our stakeholders. I look forward to your continued support and guidance.

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