Two small Japanese banks made a fresh appeal on Monday, May 7, to be allowed to combine and pledged to ease antitrust concerns, as a battle between two government agencies that could shape the fate of the nation’s 100-plus struggling regional banks intensified.
Fukuoka Financial Group has been wanting to buy Eighteenth Bank in Nagasaki prefecture and merge it with one of its three lenders, Shinwa Bank. But the Japanese Fair Trade Commission (JFTC), Japan´s antitrust watchdog, has objected to the takeover since 2016 on the grounds that the merged entity would control about 70% of the lending market in Nagasaki, which it says would limit customers’ choices and could lead to higher lending rates.
The JFTC, which is still reviewing the case, is concerned the merger could create banks that are too dominant, undermine competition and lead to the closure of bank branches in remote areas.
Although Fukuoka Financial and Eighteenth Bank did not offer concrete steps to reduce their share of the lending market in a joint statement issued on Monday, they pledged the merged bank would not raise interest rates unfairly and maintain branches in depopulated areas.
“The merger of these two banks is the best choice for the financial support of economies in Nagasaki,” the banks announced in the statement, adding that deteriorating bank earnings would hurt the local economy.
Full Content: Reuters
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