Japanese venture capital firm SBI Holdings Inc and Sumitomo Trust & Banking Co Ltd said they would launch an Internet bank this month, joining a crowded race to manage Japan's $13 trillion in household financial assets.

The bank, SBI Sumishin Net Bank Ltd, will compete with existing online lenders such as electronics firm Sony Corp's Sony Bank and unlisted Japan Net Bank Ltd, which Sumitomo Mitsui Financial Group Inc controls.

The new bank is also likely to face off with Holland's ING Group, which has said it would bring its ING Direct online bank to Japan by the end of this year.

SBI Sumishin will be half owned by SBI and Sumitomo Trust, which will split the initial investment of 20 billion yen ($176 million).

The bank would be launched on Sept. 24, pending regulatory approval, and would initially offer services such as deposits, money transfers and housing loans online and via telephone, the two companies said in a statement on Tuesday.

Eventually the bank would use its ties to another SBI unit, SBI E*Trade Securities Co Ltd, to make it easier to pay for online trading, the companies said.

The bank may also offer other products such as investment trusts, the companies said.

($1=113.60 Yen)

Japan Electronics State Bank of India