The merger of Mitsubishi Tokyo Financial Group Inc. and UFJ Holdings Inc. in October has stumbled and the firms intend to postpone integrating their core banking units for another few months, sources said Thursday.
Bank of Tokyo-Mitsubishi and UFJ Bank likely will merge on Jan. 1, while the integration of the other units under the two major financial groups will take place Oct. 1 as scheduled, the sources said.
In a joint statement released Thursday, however, MTFG and UFJ Holdings said no change had been made so far regarding their plan to merge their operations, including BTM and UFJ Bank.
The holding companies said they will make a final decision on the merger schedule after “studying whether we can achieve a safe and secure transfer that will not cause any trouble to our customers.”
The delay in the corporate marriage between BTM and UFJ Bank was caused by the Financial Services Agency’s insistence that the two groups take all measures necessary to avoid any problems that could happen when the banking units combine their computer systems, the sources said.
The FSA is worried about a repeat of the huge problems caused by a glitch in the computer system that was the result in the integration of three banks into the Mizuho financial group in April 2002.
The new BTM-UFJ Bank system will have to process transactions for as many as 40 million accounts, the most ever handled by a computer system, the sources said.
In May and July, the FSA told MTFG and UFJ that their core banking units’ computer system integration was not progressing fast enough.
Last week, it was reported that the agency had asked the two banking groups to submit an updated report on their system integration work by next Monday.
According to the MTFG-UFJ merger plan, the two computer systems, which process deposits, loans and other banking transactions, will be connected for a trial period, during which they will still be able to function separately, before being fully integrated under MTFG’s system at the end of 2007.
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