Nikko Securities Co. is contemplating selling a 50 percent equity stake in its wholly owned trust banking subsidiary, Nikko Trust & Banking Corp., to Mitsubishi Trust & Banking Corp., company officials said Monday.
Since other financial institutions have expressed interest in the stake, the brokerage is pushing negotiations with all interested parties to make a selection ahead of a planned board meeting in April, the officials said.
The board meeting will be held to approve a plan to transfer ownership of Nikko Securities and other Nikko financial group units to a holding firm.
Nikko is selling off its stake to other entities because regulations state that a holding company must limit its stake in any bank to 50 percent, they said.
Nikko plans to start the holding company by October following approval at a general shareholder meeting in June, according to the officials.
With the planned equity sale, Nikko Securities wants to enhance business ties with other financial groups as the government moves to approve a scheme based on U.S. 401(k) pension plans in the current Diet session.
Mitsubishi Trust is a key member of the Mitsubishi Tokyo Financial Group led by Bank of Tokyo-Mitsubishi.
If the 50 percent stake in Nikko Trust is sold to Mitsubishi Trust, it will open the way for the Nikko group to reconcile with the firm, with which it once enjoyed cozy ties, they said.
The relationship was severed in 1998 when Nikko concluded a tieup with Citigroup Inc. of the United States, a global rival of the Mitsubishi Tokyo Financial Group.
The officials also said that Nikko is holding talks to sell an equity stake in Nikko Asset Management Co., a key financial unit, to Mitsubishi Trust or other firms.