Dai-Ichi Kangyo Bank and J.P. Morgan and Co. of the United States has sealed a tieup agreement to sell investment trust products in Japan through DKB’s sales channels, the two companies announced Thursday.The move is an attempt to gain a competitive edge over established alliances between rival financial institutions. DKB is the first of Japan’s nine major commercial banks to form a capital tieup with a foreign financial institution.Under the agreement, DKB’s investment trust subsidiary Dai-Ichi Kangyo Asahi and an asset management wing of U.S. financial group J.P. Morgan Investment Management will establish a joint investment trust venture.It will be capitalized at about 3 billion yen under a 50-50 partnership, with operations to start as early as January, officials of the two firms said. At a news conference in Tokyo, DKB Executive Director Taira Hosaka expressed confidence that the alliance will strengthen the bank’s sales foothold in Japan by utilizing J.P. Morgan’s position in global asset management.”Although DKB has an outstanding presence in domestic retail banking, we need J.P. Morgan’s distinguished knowhow in managing investment trusts to retail these products here,” he said.Keith Schapert, president of J.P. Morgan Investment Management, stressed the partnership will allow the strategies of both companies to complement each other and serve Japanese customers. “In Japan, we want to take advantage of our combined experience and expertise to develop investment strategies for vehicles that are designed to meet specific needs of the Japanese clients,” he said. “That’s how we are going to differentiate ourselves.”The investment trust products to be introduced will be low-risk ones that are easy for customers new to the field to understand, they said.DKB aims to expand its investment trust business by forming a comprehensive capital alliance with J.P. Morgan before a ban on commercial banks’ sales of investment trust products is lifted Dec. 1.DKB has been banned from the investment trust field following last year’s revelations that it made illicit payoffs to “sokaiya” corporate extortionists.The tieup will grant J.P. Morgan access to an estimated 1.2 quadrillion yen in personal financial assets in Japan.DKB, with deposits exceeding 37.2 trillion yen as of the end of March, is ranked third among the nation’s major commercial banks. It has a strong business foothold in retail banking and a network of 400 branch offices at home and abroad.
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