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Fukuoka Financial, Eighteenth Bank delay merger again: source

Antitrust regulator balks at outsized regional market share of planned entity

Fukuoka Financial Group and Eighteenth Bank announced their planned merger in February 2016.

TOKYO/FUKUOKA, Japan -- Two of the biggest banks in southern Japan are postponing their merger for the second time this year due to antitrust fears from a regulatory watchdog, a source close to the negotiations said.

Eighteenth Bank, the largest in Nagasaki Prefecture, and Fukuoka Financial Group, the parent of second-ranked Shinwa Bank, planned to consolidate operations in October, after already putting off an April target date.

But the Japan Fair Trade Commission expressed lingering concerns that competition in Nagasaki would decline drastically. The new entity would enjoy a roughly 70% share in Nagasaki's lending market. The banks are discussing putting the merger on hold for a few additional months in order to rework plans.

A successful integration would create the biggest regional banking conglomerate in Japan, dwarfing Concordia Financial Group. Eighteenth Bank and Fukuoka Financial are looking to survive amid a shrinking market and declining population.

Further north in Niigata Prefecture, Daishi Bank and Hokuetsu Bank plan to merge as well. 

(Nikkei)

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