Japanese Banks Moving Toward Merging into World’s Largest
TOKYO (AP) _ Two of Japan’s largest banks have agreed to merge into the world’s biggest bank.
Stock and bond prices surged today following media reports that Mitsubishi Bank Ltd. and Bank of Tokyo Ltd. had agreed to merge. Bank officials at first denied the reports.
But tonight their presidents announced the merger was in the works.
``It’s a good combination,″ said Tsuneo Wakai, president of Mitsubishi Bank Ltd.
``(Mitsubishi) has a strong base that can fill out the places where we are lacking,″ said Bank of Tokyo president Tasaku Takagaki.
Analysts generally praised the merger as a good fit. Mitsubishi is a leader in commercial banking, while Bank of Tokyo is strong in overseas operations and is Japan’s leading foreign currency bank.
Details still have to be worked out and discussions with banking authorities lay ahead, but the two banks want to merge by April 1996, Wakai said.
The name tentatively chosen for the new bank is Tokyo Mitsubishi Bank, he said.
The Nikkei 225-stock index climbed to 16,681.73, up 585.48 points or 3.64 percent, after Japan’s Kyodo News Service and NHK television reported the banks would merge.
The Tokyo Stock Exchange suspended trading of Mitsubishi Bank and Bank of Tokyo shares after the reports were released.
``These are two of the best Japanese banks,″ said Salomon Brothers banking analyst Alicia Ogawa. Neither bank has bad-debt problems of the magnitude that other top banks are facing, Ogawa said.
If the merger goes through, the new bank would be the world’s largest, with assets of $814 billion and deposits of $589 billion.
Japan’s Sumitomo Bank is the world leader in assets with $601 billion. Japan’s Sakura Bank, the product of a 1990 merger between Mitsui and Taiyo Kobe banks, leads in deposits with $433 billion.