|
|
Change Your Life! |
Another big Japanese bank merger announced |
|
News |
April 20, 2000
TOKYO, APR 19 (AP) - Two more huge Japanese banks announced merger plans Wednesday, becoming the latest mega-alliance in the increasing concentration of the struggling financial sector here.
The Bank of Tokyo-Mitsubishi Ltd. and Mitsubishi Trust and Banking Corp. combination will create the world's fifth-largest financial group, '`7U approximately 90 trillion yen (dlrs 857 billion) in assets, they said.
The banks have yet to work out terms and specifics, such as any work force cuts, but they will integrate their operations under a joint holding company, tentatively named Mitsubishi Tokyo Financial Group, by April 2001.
Bank management hopes the merger will allow each institution to benefit from the other's strengths: the branch network and customer base of BOT-Mitsubishi and the asset management expertise of Mistubishi Trust.
The banks said they also hope to cooperate in growth businesses such as private banking, pension management, and electronic commerce.
Japan's banks are consolidating to become more competitive in the global economy as the government loosens regulation at home.
The financial industry is trying to recover from billions of dollars in bad loans made in the speculative lending boom of the late 1980s.
The risk of the industry's merger strategy lies in the wealth of detail, analysts said, from the gigantic task of merging computer systems to communicating changes to customers.
If banks bog down in the process, they could miss in their aim of improving productivity and efficiency, ING Barings analyst James Fiorillo said.
"Major bank management may be more overwhelmed by the task of actual physical integration over the next few years, while other firms steal market share in the financial sector," Fiorillo said.
With the liberalization of the industry, everyone from a supermarket chain to electronics giant Sony Corp. is moving into banking here.
The biggest of the recent string of mergers is the Mizuho Financial Group, which announced in August it was creating an institution with around 141 trillion yen (dlrs 1.4 trillion) in assets by merging Dai-Ichi Kangyo Bank, Fuji Bank, and the Industrial Bank of Japan.
Japan's Sanwa Bank, Tokai Bank and Asahi Bank also plan to merge, creating the country's second-largest bank with 106 trillion yen (dlrs 1 trillion) in assets.
|