Dai-Ichi Kangyo Bank, Fuji Bank and the Industrial Bank of Japan on Thursday acknowledged they are talking about forming an alliance to create the world's largest banking group in terms of assets.
Sources say the trio are in the final stage of negotiations on a broad investment banking alliance in which they would eventually merge into a single holding company. But the three banks separately said in statements that the talks were still incomplete and that it is too early to make an announcement on such a union at this time.
If executed, the three-way merger by the leading banks would create the world's largest banking group with assets of more than 140 trillion yen, which is far more than the 84.18 trillion yen held by Deutsche Bank AG of Germany, the world's current largest bank, and the 69 trillion yen held by Bank of Tokyo-Mitsubishi, the largest bank in the nation.
The plan under consideration envisions the establishment of a joint holding company by autumn 2000 for retail banking operations, investment banking and brokerage units, the sources said.
It is expected to help improve credit ratings, consolidate redundant operations to bolster efficiency, and reinforce their ability to fight off competition in an increasingly open national market under Japan's "Big Bang" of financial deregulation.
The banks are believed to have obtained informal approval for the plan from the Fair Trade Commission, according to industry sources.
The banks are expected to make a formal announcement on the deal later this month, according to the sources.