Japan Banks Agree To Merge

Published: 03-Jul-2009

The combined bank seeks to integrate overlapping functions and leverage IT infrastructure

Aozora Bank and Shinsei Bank have agreed to merge, which is subject to approval from shareholders (expected in 2010), relevant regulatory authorities and the satisfaction of certain other conditions. Analysts feel that, as domestic financial institutions continue to consolidate, the need for a neutral financial institution, unaffiliated with any particular financial group, is increasing.

The banks said that they have received approvals from their respective boards of directors and executed an alliance agreement, dated July 1, 2009. The entity established after the completion of the merger is expected to have total assets of about 18 trillion yen on an aggregated basis as of March 31, 2009.

It is expected that Norito Ikeda, who is currently a special advisor to AT Kearney KK and former President of Ashikaga Bank, will be nominated to the Board of Directors and named President and CEO of the combined bank. The two banks will establish an integration committee and an integration advisory group, and will proceed with discussions and preparations towards the merger, including the execution of a merger agreement.