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Three months after signing a basic agreement to integrate its management with Sanwa Bank and Tokai Bank, Asahi Bank reversed its stance Thursday and said it will pull out of the three-way consolidation plan.

Sanwa and Tokai announced the same day that they will go ahead with their scheme to form a joint holding company in April 2001, adding that they are considering the two-way merger in April 2002.

Asahi’s decision to pull out of the integration plan was approved at an extraordinary board meeting Thursday morning, Asahi Bank officials said.

The withdrawal signals that the realignments that have shaken the nation’s banking sector since last summer may face a bumpy road ahead. Financial sources say other banks planning tieups are facing similar difficulties in their merger plans, suggesting that the collapse of the integration deal Thursday might not be the last.

Had it been realized, the three-way merger would have created a banking group with combined assets of some 103.7 trillion yen, second only to the one to be formed by Dai-Ichi Kangyo Bank, Fuji Bank and the Industrial Bank of Japan.

Asahi Bank President Tatsuro Ito told a hastily arranged press conference that the bank decided to withdraw because of “philosophical” differences between the three institutions, particularly over what organizational structure the new banking group should take.

Ito said that around April 20, during a meeting of the banks’ top executives, Tokai and Sanwa officials proposed that the three should merge — instead of re-grouping under a holding company — in April 2002. Asahi officials preferred that the three maintain their independence under a joint holding company, Ito said.

“We, as a bank that has experienced a merger, know how much energy must be spent on one,” Ito said. Asahi was created in 1991 through the merger of Tokyo-based Kyowa Bank and Saitama Bank, which operated mainly in Saitama Prefecture.

“Since we could not agree on the two banks’ proposal for a merger, we decided against participating,” he said.

Ito said his bank will pursue its strategy of evolving into a multiregional bank focusing on the Tokyo metropolitan area, where Asahi has a strong customer base.

The Bank of Yokohama and Chiba Bank have surfaced in some media reports as Asahi’s possible future partners. While Ito said no negotiations are in progress, he added that he wants to form alliances as soon as possible.

In a statement released later in the day, the Bank of Yokohama said that at present it is not considering joining up with Asahi Bank, noting that it has heard nothing from Asahi.

Ito said that his bank has explained to financial authorities its plan to withdraw from the tieup and that it has met with understanding.

In a separate press conference jointly held by Sanwa and Tokai, officials of the two banks denied that Asahi’s withdrawal will deal a serious blow to their plans.

“We (Sanwa and Tokai) still have the largest number of branches in the Tokyo Metropolitan area than in any other region,” Sanwa Bank President Kaneo Muromachi told the news conference. “We can sufficiently cover the area (between our two banks).”

Muromachi added that the banks will not try to find a new partner to fill Asahi’s place.

On Toyo Trust & Banking Co., which Sanwa has close ties with, Muromachi expressed his desire to further strengthen ties with the bank, hinting at the possible inclusion of Toyo Trust under the planned holding company.

Asahi originally sought to tie up with Tokai, which has a strong footing in the Chubu region, centering on Nagoya, under a holding company. That consolidation proposal subsequently evolved into a three-bank alliance after Sanwa expressed interest in joining.