Daiwa Bank has joined midsize regionals Bank of Osaka and Bank of Kinki to form a broad alliance that may lead to a joint holding company in the future, officials from the banks said Monday.
The three banks, all based in Osaka, intend to improve services for customers in the Kansai region and contribute more to its economy, they said.
The agreement entails Daiwa Bank accepting most of a 20 billion yen share issue to be made by Bank of Kinki in a third-party allotment, which would augment its 5 percent equity stake, largest among all shareholders. Daiwa would also accept new shares from the Bank of Osaka through private placement.
Meanwhile, the three banks plan to form a joint committee with their presidents as cochairmen to promote broad-ranging tieups, including a joint holding company.
Daiwa Bank has a 194-branch domestic network and has stated its intent to refocus on domestic retail banking services in the Kansai region, following its pullout in October from overseas banking.
Bank of Kinki and Bank of Osaka, meanwhile, are suffering regional operators. Bank of Kinki is expected to incur a large net loss for fiscal 1998 ending in March from problem loan writeoffs of about 58 billion yen.