Shareholders in Seven Bank Ltd, which operates ATMs in convenience stores owned by Seven & I Holdings Co Ltd, raised $481 million after its IPO was priced at the top of its projected range, as investors rattled by the subprime crisis embraced its low-risk business model.

The initial public offering is Japan's biggest since Sony Financial Holdings Inc's $3 billion offering in October, and comes as demand for new issues has been hurt by the global credit crisis. The value of IPOs in Japan dropped by about 70 percent to $5.8 billion in 2007, according to Thomson Financial.

The small bank likely appealed to cautious investors because it draws revenues from bank charges at automated teller machines in 13,000 7-Eleven stores, and even at the top of the IPO range, the shares were priced more cheaply than its Japanese banking peers.

Its avoidance of lending risks puts Seven Bank in a different league to other financial institutions caught in the subprime crisis, said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments.

You can call it a financial firm, but the company is just ATMs so it doesn't have any non-performing loans. It's a simple business model based on taking fees, Ogawa said.

The fact that they priced at the top of the range probably means there was demand from institutional investors ... It's a stable, low-risk business.

Seven Bank priced the IPO at 140,000 yen per share, at the top of its pre-set range of 120,000-140,000 yen, ahead of its listing on the Jasdaq Securities Exchange, Japan's largest market for start-ups, on Friday next week.

Top shareholders including Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group are parting with 310,400 shares ahead of the listing. Seven Bank will not issue new stock but is selling 53,350 existing shares it holds.

Another 10,000 shares were on offer through an over-allotment scheme.

The price values the 30 percent stake to be floated at about 52 billion yen ($481 million), and the bank at 170 billion yen ($1.6 billion) -- about the size of regional Japanese lenders such as Keiyo Bank Ltd and Shiga Bank Ltd.

The book-building, which finished on Wednesday, was overseen by lead managers Nomura Securities, Nikko Citigroup and Morgan Stanley.

Seven Bank opened in 2001 after deregulation allowed outsiders to enter Japan's banking sector.

The bank forecasts net profit will increase 3 percent to 13.1 billion yen this business year, or earnings per share of 10,737.7 yen.

Based on that forecast and the IPO price, Seven Bank would trade at a price-to-earnings (PE) ratio of 13, compared with nearly 17 for Japanese banks, according to Reuters Data.

Banks that allow their customers free access to Seven Bank ATMs must pay charges to Seven Bank but save money in the long-term by avoiding the cost of having their own ATMs.

Seven Bank has said it would use about 7.1 billion yen in proceeds from the sale of shares to build up its ATM network. ($1=108.06 Yen)

Japan Investment Morgan Stanley Citigroup