Japan Regional Banks Joining Hands for Survival

Economy

Tokyo, May 14 (Jiji Press)--Regional banks in Japan are joining hands for survival as the novel coronavirus epidemic is adding to the difficulties the industry already faces due to shrinking populations and prolonged low interest rates.

Aomori Bank <8342> and Michinoku Bank <8350>, both of which operate mainly in Aomori Prefecture, northeastern Japan, on Friday announced a basic agreement to integrate their operations.

Also on Friday, Fukui Bank <8362> said that it will make Fukuho Bank a subsidiary on Oct. 1. They are operating in the central prefecture of Fukui.

Tsukuba Bank <8338>, whose main business area is Ibaraki Prefecture, eastern Japan, said on the day that it will strengthen its ties with Japanese online financial service giant SBI Holdings Inc. <8473> through a capital partnership.

Aomori Bank and Michinoku Bank, long-time rivals, will set up a joint holding company in April 2022. They will aim to merge in April 2024. With their combined share of outstanding loans in Aomori reaching 70 pct, the two banks will seek approval under a special measure in the antimonopoly law that exempts integrations from the law. It would be the first time for the special measure to be applied to the business integration of financial institutions since it went into force in November 2020.

[Copyright The Jiji Press, Ltd.]

Jiji Press