Japan's Daishi, Hokuetsu to merge in latest bank consolidation (updated)
05/04/2017 05:58
* Two banks in Niigata to set up a joint holding company
* Banks consolidate amid falling population in small cities
* New company to control 51 pct of lending in Niigata
prefecture
(Adds comments from the banks)
TOKYO, April 5 (Reuters) - Daishi Bank Ltd 8324.T and
Hokuetsu Bank Ltd 8325.T , two small Japanese lenders, said on
Wednesday they had agreed to merge their operations, the latest
consolidation in regional banks amid a decline in population.
A shrinking population and the central bank's negative
interest-rate policy have created a tough business environment
for Japan's roughly 100 so-called regional banks, prompting some
to merge or take other steps to shore up their operations.
Daishi and Hokuetsu said the merger was needed to strengthen
their management platform during this difficult time for the
industry.
"Our saving and lending is expected to shrink in the future
as population falls," the two banks said in a joint statement.
"Under the nation's extended monetary easing policy, our
lending margin and profits from securities investments are
expected to shrink as well."
The two banks, both based in Niigata prefecture on the Sea
of Japan coast, will set up a holding company in April 2018
under which they will operate. The banks said they have yet to
finalise how much each will hold in the new company.
Daishi and Hokuetsu would control 51 percent of the lending
in Niigata prefecture, according the Financial Journal Co, an
industry publication.
The consolidation of Japan's regional banks has raised some
anti-competitive concerns.
The Fair Trade Commission has blocked plans by Fukuoka
Financial Group Inc 8354.T to buy Eighteenth Bank Ltd
8396.T , so it can conduct a further review. Fukuoka Financial
wants to merge Eighteenth Bank with Shinwa Bank Ltd, which is
already under Fukuoka's control.
If approved, Fukuoka Financial Group would control more than
70 percent of the lending in Nagasaki prefecture.
(Reporting by Junko Fujita; Editing by Himani Sarkar and Randy
Fabi)
((813-6441-1840, junko.fujita@thomsonreuters.com, Reuters
Messaging:junko.fujita.reuters.com@reuters.net;))
Keywords: JAPAN BANKS/DAISHI BANK HOKUETSU BANK