Sony Corp. announced Thursday that it has formally decided to set up an Internet-only bank in cooperation with Sakura Bank and J.P. Morgan of the U.S.

The new bank, which will begin operations in the first half of next year, is capitalized at 37.5 billion yen. Sony will own 80 percent of the online bank, while Sakura Bank will hold 16 percent and J.P. Morgan 4 percent, the officials said.

"We think of the planned bank as one of our core business activities," Sony President Nobuyuki Idei told a joint news conference in Tokyo. "We envision all personal computer users becoming branches of and windows to Sony's bank."

Sony officials said the online bank will aim to attract 1 trillion yen in deposits in the first five years after the bank's launch.

While awaiting approval from the Financial Supervisory Agency, the entry of the global electronics maker into banking is sure to spark further competition in the banking sector.

Through the tieup, Sakura Bank, which plans to set up its own Internet-only bank with Fujitsu Ltd. and other firms, will provide Sony with expertise on how to build the computer system and operate the bank.

Sakura will also open its network of automatic teller machines -- expected to number 1,500 across Japan by June -- to the Sony bank.

J.P. Morgan will provide online private banking services, which it launched in the U.S. two weeks ago.

With the launch of the bank, people buying products and services provided by Sony, ranging from entertainment to automobile and life insurance, will be able to settle their purchases online.

The bank's clientele will include users of Sonet, an Internet service provider operated by Sony, officials said.