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TOKYO (Jiji Press) — Aichi Bank and Chukyo Bank , both based in Nagoya, Aichi Prefecture, central Japan, are in the final stages of talks on merging their operations, sources familiar with the matter said Thursday.
The second-tier regional banks are considering setting up a holding company as early as 2022 to integrate their operations, the sources said. An outright merger between them a few years later is possible, the sources said.
The talks between Aichi Bank and Chukyo Bank come as Japanese banks are struggling with low interest rates and the COVID-19 pandemic.
In Aichi, many lenders, including Aichi Bank, Chukyo Bank and MUFG Bank, the successor of Nagoya-based Tokai Bank, are competing for share.
The Yomiuri Shimbun Chukyo Bank
Aichi Bank and Chukyo Bank had ¥4,071 billion in outstanding loans together as of the end of March. The combined lender will become the largest second-tier regional bank in Aichi, surpassing Bank of Nagoya , which had ¥3,170.6 billion in loans.
MUFG Bank, a unit of Mitsubishi UFJ Financial Group Inc. , has close ties with both Aichi Bank and Chukyo Bank. MUFG Bank owns about 40 pct of Chukyo Bank. It plans to maintain business ties with the combined lender.
Aichi Bank and Chukyo Bank are expected to announce their merger plan as early next week, the sources said.
“We’re considering a merger, but nothing has been decided at this point,” an Aichi Bank official told Jiji Press. A Chukyo Bank official said, “There is nothing to comment on at this point.”
