In a bid to increase its presence in securities businesses, Sanwa Bank announced Thursday it will let midsize brokerage house Taiheiyo Securities Co. merge with Sanwa's two securities affiliates in April 2000.
The three securities firms -- Taiheiyo, Universal Securities Co. and Towa Securities Co. -- have planned board meetings for Friday to seek approval for the plan.
With assets totaling 190 billion yen, Universal Securities will be the surviving company, and its president Hirokuni Munechika will head the new firm, Universal officials said. The chairman of the merged company will be sent from Taiheiyo, and a vice president from Towa, they added.
The new firm will have a combined capital of 45 billion yen and about 3.5 trillion yen in entrusted assets. The merger ratio has yet to be decided, the officials said. Sanwa, a major city bank based in Osaka, has been looking for ways to expand its securities unit to strengthen retail marketing, especially in the area of investment trusts.
In April, Sanwa acquired a 30.3 percent stake in Universal, which had been closely linked to the Daiwa Securities group. Towa, which is unlisted, is also under the Sanwa group. Partners Asset Management Co., which Sanwa purchased from Yamaichi Securities Co. after its collapse in November 1997, is a major shareholder of Taiheiyo, a former Yamaichi affiliate.
The merger plan comes in the midst of "Big Bang" deregulation reform, which is quickly eliminating the walls between the banking and securities businesses. The latest development is likely to further fuel reorganization of the securities industry, where competition is intensifying ahead of the full liberalization in October of securities transaction fees.
In March, two second-tier brokerages under the Industrial Bank of Japan, New Japan Securities Co. and Wako Securities Co., announced plans to merge in April 2000.