The online banking unit, to be known as Sony Bank Corp, would be capitalised at 37.5 billion yen ($322.9 million) and operate in cooperation with Sakura Bank Ltd and JP Morgan Chase, targeting individual online shoppers.

It would add to Sony's growing Ffnancial profile and make it the latest entrant in Japan's debt-laden banking sector. Under the application filed with Japan's Financial Services Agency, Sakura Bank will take a 16 per cent stake and JP Morgan Chase four per cent, with Sony owning the remaining 80 per cent. The bank will aim for deposits of 600 billion yen after three years of operation and one trillion yen after five years.

"Sony Bank would offer one-on-one financial services to meet the varying needs of individual clients through Internet and Automatic Teller Machine (ATM) channels, without having physical sales outlets," Sony said in a statement.

The news drew little surprise from investors, who had already anticipated Sony's entry into the banking business. Shares of Sony, dubbed the bluest of Japan's blue chips, ended the day down 0.12 per cent at 8,450 yen, in-line with a broader weakness in the Tokyo market on Wednesday. "The business plan was the same as the company's previous announcement, so I don't see any direct impact," said Mr Yukie Saito, an analyst at Lehman Brothers in Tokyo. Mr Saito lowered Sony's rating to market perform from buy on Tuesday, partly due to the performance of the loss-making game sector.

Rising financial clout The entry will boost the financial clout of the Sony group, which already includes insurance and online brokerage units, while facilitating much-needed reforms in the nation's banking sector, now under a wave of sweeping consoli dation. Users will be able to pay for their online shopping through Sony's online banking unit, either through the Internet or through Sakura's ATMs.

The new online bank will also take yen and foreign-currency deposits from individuals and offer credit card service and housing loans in its initial year of operation.