Now that the nation’s major banks have settled into four gigantic banking groups, they have secured the scale they wanted. However, they seem to be struggling with one important factor: specialization.

Wednesday’s move by Mitsubishi-group banks to consolidate their management signals the end to the first round of megamergers in the nation’s banking industry.

The move for a manage- ment consolidation announced last August by Dai-Ichi Kangyo Bank, Fuji Bank and the Industrial Bank of Japan has shaken the competition-naive sector to the core, triggering a tieup frenzy among other major banks in the following eight months.

Although none of the megamerger announcements has yet to be implemented, Japanese banks, which have spent the last decade gasping for air under massive bad loans, are poised to compete squarely with the world’s top ranking banks — at least in size.

The Mizuho Financial Group, to be set up this fall by DKB, Fuji and IBJ, will be the world’s largest banking group, while a holding company to be set up by Sanwa Bank, Tokai Bank and Asahi Bank will rank second. A merger between Sakura Bank and Sumitomo Bank will create the third largest group, while the tieup between the Bank of Tokyo Mitsubishi and Mitsubishi Trust will make them the fifth largest in the world.

Each of the four has its own character. The Mizuho group will stand out by the single fact that it will be the world’s largest banking entity. It has also expressed an intention to do everything, from retail banking and wholesale banking to investment banking. The presence of the IBJ especially gives the group an edge in investment banking, some analysts say.

The Sumitomo-Sakura tieup, meanwhile, will give birth to a bank with balanced strength in both retail and corporate operations. Sakura is also a neck above its rivals in its attention on e-banking, with its own initiative to set up an Internet-only bank and the plan for a minority stake in the e-bank to be created by Sony Corp.

The Sanwa-Tokai-Asahi camp is seen to secure a competitive edge in domestic retail banking operations, since the three have different bases across Japan.

But analysts are skeptical as to whether any of the four will emerge as a global winner, citing a lack of focus and unwillingness to give up the unprofitable business.

“There is one feature in common (among the four), which is disappointing,” said Brian Waterhouse, senior analyst at HSBC Securities Japan. “They all want to go to new businesses.”

James Fiorillo, senior analyst at ING Barings Japan, agreed.

“Consolidation is not supposed to be all about size,” he said. “It is about first finding a specialization and then a partner that will complement that role. So far form has not followed function in the sector and this merger looks as defensive as the rest. . . . The hope is that the major banks will now be moving to an era of specialization.”

The irony might be that, amid fast-paced changes in the financial industry, there is not much time for banks to find focus.

“Speed is imperative in the financial industry,” said Koji Shimamoto, strategist at Paribas Capital Markets. “While many people are reluctant to point this out, the key to speedy decisions might hinge on whether these banks can go ahead with the change of leadership to a younger generation.”