FUKUOKA (Kyodo) Fukuoka Financial Group Inc., the Fukuoka-based parent of two large regional banks in Kyushu, said Thursday its board has decided to buy Shinwa Bank, the banking arm of Kyushu-Shinwa Holdings Inc. based in Sasebo, Nagasaki Prefecture, by Sept. 7.
Fukuoka Financial is planning to pay up to 76 billion yen to Kyushu-Shinwa Holdings, with the final price to be set via an upcoming examination of Shinwa Bank's assets and liabilities, the financial group said.
Fukuoka Financial will buy all of the outstanding common and preferred shares of Shinwa Bank as well as 85 percent of the common shares of Shinwa DC Card, the holding firm's credit-card subsidiary, it said.
Kyushu-Shinwa Holdings will disband after handing over these shares to Fukuoka Financial, it said.
Fukuoka Financial Group was set up April 2 through the management integration of Fukuoka Bank and Kumamoto Family Bank based in Kumamoto.
On May 2, Kyushu-Shinwa Holdings asked Fukuoka Financial to channel fresh capital into Shinwa Bank, a relatively large regional lender with an asset base of 2.37 trillion yen that many local corporate borrowers depend on for credit, the sources said.
Kyushu-Shinwa Holdings and Fukuoka Financial announced plans to integrate management at that time.
"This transaction is designed to enable Shinwa Bank to continue its business operations from the standpoint of protecting the bank's customers and secure the stability of the regional financial system," Fukuoka Financial and Kyushu-Shinwa Holdings said Thursday in a statement.
In a related development, the Tokyo Stock Exchange said it has transferred the stock of Kyushu-Shinwa Holdings to the monitoring post because the holding firm's board decided to disband.
Fukuoka Financial is Japan's fourth-largest regional financial group and has an asset base of as large as 9.3 trillion yen.
The purchase of Shinwa Bank will turn it into Japan's largest regional financial group.