Japan's Seven Bank Jumps 24 Percent on Debut

(Updates stock price, valuations)

By Nathan Layne and David Dolan

TOKYO (Reuters) - Japan's Seven Bank Ltd (8410.Q: Quote, Profile, Research, Stock Buzz) jumped 24 percent in its market debut on Friday following a $501 million IPO as investors embraced a bank that makes its money from cash machine fees, instead of lending.

As major banks report subprime losses in the billions of dollars, Seven Bank's low risk business of collecting fees from customers of other banks using 13,000 ATMs mainly at its parent's 7-Eleven convenience stores caught the eye of investors.

The initial public offering, Japan's biggest since Sony Financial Holdings Inc's (8729.T: Quote, Profile, Research, Stock Buzz) $3 billion offer in October, comes as the global credit crisis has hurt demand for new listings.

"Seven Bank is completely unrelated to the subprime issue, and from that perspective it is easy for investment trusts and pension funds to chose this stock," said Shigemi Nonaka, a special adviser at Polestar Investment Management.

Nonaka said Seven Bank still had room to grow its customer base through the group's expanding retail network and by installing more ATMs in train stations and department stores.

"It should be able to grow steadily over the long term."

Shares of Seven Bank, which raised 52.3 billion yen in the IPO including an overallotment, jumped to 174,000 yen on Friday, up from the pre-market price of 140,000 and bucking a 0.1 percent fall in the Nikkei Jasdaq index .