TOKYO -- Two of the nation's largest regional banks are moving to partner with Japan Post Holdings in providing services to underpopulated areas, possibly heralding a broader industry trend.
"We have begun talks" with Japan Post Holdings, Bank of Yokohama President Tatsumaro Terazawa told The Nikkei on Wednesday. Terazawa also expressed enthusiasm about the possibility of contracting out banking services to post offices.
North Pacific Bank is considering creating a joint regional revitalization fund, as well as partnerships to expand services into less-populated areas. The Hokkaido-based bank will likely look at stronger partnerships in ATMs, for example.
Japan Post Bank already partners with Shizuoka Prefecture-based Suruga Bank in mortgages. But most regional players only share ATMs with the Japan Post Holdings arm, making limited use of the postal group's broad network.
Banks cannot sustain branches in sparsely populated areas, and post offices could earn commissions by providing banking services. Financial authorities plan to approve partnership applications from banks in order to better serve remote populations.
Post offices now handle ordinary savings and deposit accounts, cash transfers, and other services for Japan Post Bank. Japan Post could handle such services as deposits and withdrawals in partnership with Bank of Yokohama as well, with other regional banks expected to follow suit.
A government panel in charge of privatizing the Japan Post group decided Dec. 25 to raise the deposit limit for Japan Post Bank accounts to just 13 million yen ($106,899) from 10 million yen, despite demands for a 30 million yen ceiling from lawmakers in the ruling Liberal Democratic Party. The small size of the increase has likely contributed to regional banks' growing interest in collaborating with Japan Post.