The Finance Ministry applauds a plan by Dai-Ichi Kangyo Bank, Fuji Bank and the Industrial Bank of Japan to form a full-scale alliance, Vice Finance Minister Nobuaki Usui said Monday.
The plan by the three banks, which will be setting up a joint holding company and consolidating their operations, will help promote the nation's financial system reform, Usui told a regular news conference.
He said he expects the move to stimulate other Japanese financial institutions, which may be considering realignment.
Usui confessed he had not heard of the banks' megamerger plan in advance, saying he was surprised to hear the news on TV at home last Thursday.
In a separate news conference, Osamu Watanabe, vice minister of international trade and industry, voiced expectation that the planned alliance will spur restructuring in other industries.
Welcoming the move, he said the banks will probably withdraw from unprofitable businesses and seek optimal efficiency as a result of the alliance.
"Such behavior will prompt other industries to speed up consolidation of (their businesses) and select (more profitable businesses)," Watanabe said.