Tokyo, Oct 8: In the Japanese banking sector's latest realignment, Asahi Bank Ltd and Tokai Bank Ltd said they will form a joint-holding company in October 2000, effectively creating the nation's third-largest bank. This comes on the heels of news in August that three other major Japanese banks would merge to create the world's largest bank in terms of assets. It reflects the increasing pressure on the nation's financial companies to stay competitive as the government deregulates the industry.Over the next 12 to 18 months, some analysts say that the number of major Japanese banks will be whittled down to as few as six or seven from the current 17, mainly as a result of mergers. Tokai and Asahi had previously said they would form a joint holding company in the fiscal year starting in April 2001. Tokai President Hideo Ogasawara, who will serve as president of the new bank, said the banks decided to move the merger forward because of progress made in restructuring and debt write-offs. Asahi Bank President Tatsuro Itoh will become chairman of the new bank.
The banks said the new alliance will focus on developing regional operations, targeting retail banking and small-to medium-size company customers. It will also cut down on overlaps, trim costs and raise profits.
-- The Wall Street Journal
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