Sony Bank Inc. posted a net loss of 2.1 billion yen in fiscal 2003 for third consecutive annual loss since it started operations.
The online bank, which was established by electronics giant Sony Corp. in 2001, said Friday the loss was due to low returns from loans under the nation's low interest rates.
It said it was also hurt by severe competition with other major banks offering housing loans, Sony Bank's core service.
It had expected to be in the black in the reporting year. But it now estimates a loss of about 1.8 billion yen, even in the current year.
The bank narrowed its net loss in fiscal 2003 by 2.4 billion yen from the previous year.
"Our bank will turn to the black in fiscal 2005, considering the current growth of accounts," Sony Bank President Shigeru Ishii told a Tokyo news conference.