Shinsei Bank and Aozora Bank have reached a basic agreement to merge next year and create Japan's sixth-largest banking group in terms of assets, sources said Thursday.
The Tokyo-based banks decided on the merger to help improve their financial standing and profitability, which have been badly hurt due to their aggressive investment in high-risk financial instruments overseas that crumbled in the global financial crisis, the sources said.
The banks will formally announce the merger early next month, the sources said.