Japan Banks Move Up Merger Plans
TOKYO (AP) _ Sumitomo Bank and Sakura Bank are moving up their planned merger by one year to keep up with the quickening pace of mergers in Japan’s banking industry.
Sumitomo and Sakura had originally planned to start working together as ``twin banks″ by April next year with the merger following by April 2002. But they have now pushed the merger up to April 2001, the banks said Friday.
The combination, which will be called Sumitomo Mitsui Banking Corp., will have assets of about $937 billion, making it the world’s third largest financial institution behind two other Japanese financial institutions being created by mergers.
The acceleration in alignments among Japanese banks helped drive Sumitomo and Sakura to move up the date, Sakura President Akishige Okada told reporters.
A deal creating the Mizuho Financial Group is expected to be completed in September with the combination of Dai-Ichi Kangyo Bank, Fuji Bank and the Industrial Bank of Japan. It will have assets totaling about $1.3 trillion.
Sanwa Bank, Tokai Bank and Asahi Bank plan to merge in April next year with combined assets of about $1 trillion.
Earlier this week, the Bank of Tokyo-Mitsubishi and Mitsubishi Trust & Banking Corp. said they are combining to create a banking company with about $857 billion in assets.
Germany’s Deutsche Bank is currently the world’s largest banking firm with assets of about $840 billion after swallowing Bankers Trust of the United States.
The Sumitomo Mitsui Banking combination would untite the family-business conglomerates Sumitomo and Mitsui, which have been prominent parts of the nation’s financial and industrial fabric since the 1800s.
Sakura Bank is the core of the Mitsui group, created through a merger between Mitsui Bank and Taiyo Kobe Bank in 1990.
Among the new bank’s strategies are bolstering retail operations, strengthening businesses for corporate customers, investing in information technology and leading in online banking, Sumitomo President Yoshifumi Nishikawa said.
On the Tokyo Stock Exchange, shares of Sumitomo Bank closed down 11 percent while Sakura Bank shares rose 4.4 percent on Friday.
Under the merger terms, one Sakura Bank share will be equal to 0.6 share of Sumitomo Bank.
Sumitomo’s Nishikawa will become president of the new bank, while Sakura’s Okada will serve as chairman.
Both banks have said they will try to cut costs ahead of the merger.
The banks will cut their number of employees by a combined total of 6,300, or 20 percent, by the time of the merger, and another 3,000 by March 2004. They plan to close about 260 outlets from their combined 735 domestic outlets as of 1998, and shut 38 of their 60 overseas outlets.