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The Bank of Japan expects that the negotiations between Hokkaido Takushoku Bank and Hokkaido Bank on their merger will eventually go on smoothly, a senior BOJ official said Sept. 12.

The two banks announced earlier in the day the postponement of the planned merger.

The official applauded the two banks for revealing the new October 1998 target date for the merger. He said never expected the plan to be delayed in April when it was initially announced, but understood the perception gap between the two banks about Hokkaido Takushoku’s bad loans. “It is impossible to say who is right in evaluating the bad loans,” he added. He categorically denied the possibility that the two banks will scrap the merger plan altogether.

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