Eight groups from the financial industry have issued a joint statement over their opposition to Japan Post Bank’s plan to launch housing and corporate loan services.
The Thursday statement criticized the banking arm of government-held Japan Post Holdings Co. for “pursuing business expansion while still a government enterprise and disadvantaging the private sector.”
The eight groups, including the Japanese Bankers Association, issued the statement after the financial behemoth filed for regulatory approval of the new services earlier this month.
Japan Post Bank “should devote itself to complementing private-sector services and refrain from entering into services that the private sector can provide,” Yasuhiro Sato, chairman of the Japanese Bankers Association, said at a news conference.
This is because it has not been made clear when Japan Post Bank will be fully privatized, said Sato, who is also president of Mizuho Financial Group Inc.
The statement said Japan Post Bank’s foray into the new fields poses a problem because of its sheer reach and size, which stem from its conversion from the state-owned postal savings system, which at the time was often called the world’s largest bank.
Hidetoshi Sakuma, chairman of the Regional Banks Association of Japan and president of Chiba Bank, said Japan Post Bank’s new services will “have a serious impact on regional banks’ operations.”
The other six groups are the Trust Companies Association of Japan, the Second Association of Regional Banks, the National Association of Shinkin Banks, Community Bank Shinyo Kumiai, JA Bank and JF Marine Bank.
Tohoku banks get FSA aid
The Financial Services Agency said it will inject a total of ¥40 billion in public funds into Tohoku Bank and Kirayaka Bank, both located in areas affected by the March 2011 disasters.
Tohoku Bank, based in Morioka, Iwate Prefecture, will receive ¥10 billion on Sept. 28, while ¥30 billion will be pumped into Kirayaka Bank, based in the city of Yamagata, on Dec. 28.
The public fund injections are based on a special law provision aimed at supporting banks in the northeastern areas devastated by the disaster.
The two banks will use the public money to strengthen their financial bases so they can meet demand for funds for postdisaster reconstruction projects.
The number of banks receiving public funds under the special provision will come to 12, with the combined amount of funds injected reaching ¥231 billion.
Under the special measure, recipient banks are exempted from certain requirements, such as clarifying management responsibility and setting earnings targets.
Kirayaka Bank is set to merge with Sendai Bank on Oct. 1.
Sendai Bank received ¥30 billion in public funds last September.
Kirayaka Bank, meanwhile, received ¥20 billion in public funds in September 2009.
The bank will repay the money taken out before the March 2011 disaster and then newly receive the ¥30 billion.
After the fund injections, Tohoku Bank’s capital-to-asset ratio is expected to improve to 11.7 percent, and the ratio at Kirayaka Bank is seen rising to 10.4 percent.
Trust funds boost value
The net asset value of publicly offered investment trust funds grew for the third consecutive month in August, according to the Investment Trusts Association.
At the end of August, the value rose ¥1.4 billion from a month before to ¥58.58 trillion, the association said Thursday.
Growth slowed from ¥219.8 billion in July, as the value of stock investment trusts, which account for 80 percent of the total, fell for the first time in three months due to small fluctuations in stock prices.
Stock trusts posted net investment losses of ¥142.1 billion. Although they logged gains of ¥243.9 billion thanks to rising stock prices abroad and the yen’s weakening against the euro, a total of ¥386 billion flowed out in the form of dividends.
Net cash inflows, or sales of new funds excluding repurchases and redemptions, into publicly offered investment trust funds increased to ¥143.7 billion from ¥49.5 billion the previous month. This made up for the asset losses in stock funds and prevented the total asset value from falling.
With around ¥400 billion flowing out in the form of dividends every month, stock funds post investment losses when stock prices move slightly, Fumio Inui, vice chairman of the association, said.