In a strategic move to secure an edge over competitors amid ongoing “Big Bang” financial deregulations, four financial firms in the Mitsubishi group announced Friday they are forming a business alliance that will provide a wide range of new financial services.
The four companies — the Bank of Tokyo-Mitsubishi, Mitsubishi Trust & Banking Corp., Meiji Life Insurance Co. and Tokio Marine & Fire Insurance Co. — said they will set up a new investment trust venture as early as December.
“Four financial firms in the Mitsubishi group have agreed to invest the necessary human and financial resources into our alliance,” Bank of Tokyo-Mitsubishi President Satoru Kishi told a news conference in Tokyo. “At the same time, we will further strengthen the advantage we have already established in each of our business fields.”
The four companies are committed to responding to customers’ diversifying needs for new financial services, Kishi said.
“As a matter of fact, this alliance was not formed because we need mutual assistance to manage our businesses,” said Kokei Higuchi, president of Tokio Marine & Fire Insurance. “Each of us has already established strong footholds in our fields. This is an attempt to combine our power in times of change.”
The new investment trust venture will evaluate the performance of investment trust products retailed in Japan for sales channels owned by the four firms, the presidents said. The venture will be capitalized initially at 480 million yen. The company name and president will be decided later, the presidents said.
Investment trusts, similar to mutual funds in the U.S., are expected to play a growing role in managing the nation’s personal financial assets of 1.2 quadrillion yen. Many financial firms, both domestic and foreign, are attempting to build a strong foothold in the investment banking field.
The four firms will also jointly develop new infrastructure, such as computer systems, to handle the high-risk, high-return Japanese version of U.S. 401(k) pension programs that is expected to be introduced here in the future, the presidents said.
Unlike existing pension programs that are conservatively managed, funds collected under the new program will be invested in high-risk securities. The government is expected to lift a ban on such programs as a means of revitalizing the stock market.
Minoru Mochida, vice president of Meiji Life Insurance, expressed confidence that the group alliance will boost Meiji’s advantage in dealing in 401(k) plans on the Japanese market. “In a society where an increasing number of people count on pension income, we will make further efforts to provide proper asset management services for our customers,” he said. “Although there are still legal hurdles to be cleared before the new pension program’s introduction, we are confident that our alliance will bring good results to our customers.”
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