TOKYO - Bank of Yokohama Ltd, Japan's second-largest regional lender, said on Tuesday it is considering a merger with smaller rival Higashi-Nippon Bank Ltd , a major move in an industry urged by regulators to consolidate amid bleak growth prospects.
There have been mergers of small lenders in recent years, but a tie-up involving a regional lender as big as Bank of Yokohama could herald a new stage in Asian bank consolidation, a shake-up considered overdue by authorities and industry insiders.
A merger between Bank of Yokohama, with 13.8 trillion yen (S$156.6 billion) in assets and Higashi-Nippon, with 1.96 trillion yen in assets, would create the biggest regional lender in Japan, topping the current leader Fukuoka Financial Group Inc . There are about 100 regional banks in Japan.
In separate statements, Bank of Yokohama and Higashi-Nippon said they were considering a merger but nothing had been decided.
Twenty-three Japanese banks melded into today's four major banking groups over the tumultuous 15 years of post-bubble economic and financial crisis through 2005. Regional banks, which extend roughly half of Japan's US$4 trillion (S$5.16 trillion) worth of outstanding bank loans, have largely been spared the knife so far.
The Nikkei business daily reported earlier that the two are in talks to merge under a joint holding company, a move that would create Japan's biggest group of regional banks.