Sanwa Bank and Toyo Trust & Banking Co. have agreed to form an extensive business alliance to survive the ongoing "Big Bang" financial reforms, officials of the two banks announced Wednesday.
The banks' top executives told a news conference that they have agreed to collaborate in the marketing of a Japanese version of U.S. 401(k) pension plans. The two banks will establish a joint company to promote the sales of such plans, the officials said.
The two sides have also decided to cooperate in the development and use of business infrastructure by sharing automatic teller machines and jointly running multifunctional branches.
Under the agreement, Toyo Trust will merge with Sanwa Trust & Banking Co., a Sanwa subsidiary, and integrate custody business of Sanwa Bank. Sanwa will help Toyo pull out of its overseas loan business by taking over its operations, the bank officials said.
The officials refused to announce the specific amount of money involved in the deal, saying the details have yet to be worked out.
The planned tieup is likely to accelerate the reorganization of the financial industry, which is under great pressure from financial authorities to improve its competitiveness or else have its bids for injections of public money rejected.
Toyo Trust president Nobuyoshi Takeuchi said the alliance with Sanwa will allow the trust bank to make up for its weak client base and utilize Sanwa's rich corporate and individual client base. Takeuchi cited the firm's small number of branches — 63 at home and abroad — as one of problems the trust bank faces in surviving the Big Bang era.