Japan Post Bank to be home lender

Kyodo

A government panel proposed Tuesday conditionally allowing Japan Post Bank to launch three new businesses, including offering housing loans, fueling concerns about fair competition between the government-backed entity and private-sector rivals.

The panel, discussing the privatization of postal services, has recently granted similar approval to Japan Post Insurance Co., another unit of Japan Post Holdings Co.

In addition to housing loans, Japan Post Bank hopes to start offering fire insurance policies and corporate loans.

The advisory panel will present the proposal to the Financial Services Agency and the Internal Affairs and Communications Ministry to make a final decision.

The bank hopes to start the businesses as early as April. But the FSA has shown reluctance against the backdrop of protests from private competitors and concerns about the system with which Japan Post Bank will control its risk exposure.

The panel did not make clear the conditions it will impose, but it is expected to limit the area in which the lender can offer new products and impose strict rules for screening borrowers.