The organizational structure of the financial group to be formed in April through the integration of Sanwa Bank, Tokai Bank and Asahi Bank will be finalized by September, Sanwa Bank President Kaneo Muromachi said in a recent interview.

Muromachi said executives of what would be the second-largest banking group in the world are ironing out differences in business strategies the three city banks use.

“Before we decide on our future organizational structure, we must first decide what business strategies we will take,” the 61-year-old top official of the major city bank said. “We need to coordinate the trio’s business strategies in areas ranging from banking for individuals and small and midsize corporations, as well as operations for large firms and those overseas.”

Muromachi said he will refer to ongoing consolidation efforts at other banks, hinting that the final structure of the group could either be a single merged entity or a holding company under which the banks would be grouped by business segment or region.

Construction of the Mizuho Financial Group comprising Dai-Ichi Kangyo Bank, Fuji Bank and Industrial Bank of Japan, for example, will start with a joint holding company and maintain the structure of each bank. Its second phase of consolidation, to begin in spring 2002, will see the banks reformed into several banks — including one for retail banking and another for wholesale banking.

Meanwhile, Sumitomo Bank and Sakura Bank have opted to merge in the belief that the effect of consolidation will be stronger that way.

The first chapter of the megamerger trend began with the announcement of the DKB-Fuji-IBJ tieup last fall and ended in April with the announcement that the Bank of Tokyo-Mitsubishi will tie up with Mitsubishi Trust & Banking Corp.

Now most of the nation’s major banks are settled into four gigantic groups: Mizuho, Sumitomo-Sakura, BTM-Mitsubishi Trust and Sanwa-Tokai-Asahi.

The Sanwa-Tokai-Asahi group is believed to have an edge over other large banking groups in terms of business with individuals and small and midsize firms.

But it lacks luster in investment banking and overseas operations — leaving open the possibility of future tieups with other financial institutions.

Muromachi said he is open to alliances with other firms in these areas, regardless of whether they are of domestic or foreign origin. He cautioned, however, that no specific negotiations are in progress.

While the banking industry has seen several mergers in the postwar era, it is no secret that integration is painful for everyone involved — political wrangling and culture clashes are known to last years after a merger.

Commenting on how to make an integration of three huge banks successful, Muromachi said the key is a shared goal of creating a powerful bank together. Specifically, the banks need to share such goals as providing valuable services to customers, getting good evaluations from investors and creating a rewarding workplace for employees.

“Each of the banks must do away with ‘me-ism,’ ” he said. “The key is to pick the best of everything from the three banks, whether it be a computer platform or product line. That will enable us to secure speed of integration.”

For that reason, Sanwa and the two others will not engage in “tasuki-gake,” the notorious practice of dividing important posts equally among merging firms regardless of the caliber of each employee, Muromachi said.

“Of course, when we merge, it is unrealistic to imagine (key positions) being occupied by a single firm,” he said. “But we should not make a rule of making personnel decisions in a tasuki-gake style.”

While the presidents of the three banks will share power as cochief executive officers in the first phase of integration starting next April, they are committed to making the board of directors as transparent as possible by inviting outsiders to join the board, he said. The board will then choose one CEO to take office in April 2002.

“It would be wrong if the three of us presidents got together behind closed doors and decided to rotate the top post,” he said. “But the board will pick the best person, and the person doesn’t have to be any of the existing presidents. . . . In fact, none of us necessarily wants to take that post.”