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Common challenges spur merger of Japan's Mie Bank, Daisan Bank

April 2018 move aimed at coping with rivalries, population woes

TOKYO -- Japan's Mie Bank and Daisan Bank on Tuesday said they have agreed to merge, in principle, as they strive to boost their competitiveness and deal with demographic challenges.

The two regional lenders are headquartered in the prefecture of Mie, southwest of Nagoya. They plan to pair up under a new holding company to be established on April 2, 2018. They will set up a committee to prepare for the merger and aim to reach a final accord by this September.

The details of the holding company -- including the name, location and ownership structure -- are still up for discussion.

The banks face weak demand for loans in Mie, where the population is declining. Meanwhile, there is stiff interest rate competition between major banks and regional lenders in nearby Aichi Prefecture -- seen as a growth market.

Mie Bank and Daisan Bank hope to enhance efficiency and raise their profile in the broader Chubu region, surrounding Nagoya.

The merger would bring their combined gross assets to 3.9 trillion yen ($34.7 billion), based on figures as of last September. This would make the new entity Japan's 35th-largest player, ahead of rival regional lender Bank of Nagoya and not far behind Hyakugo Bank's assets of 5.3 trillion yen.

(Nikkei)

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