The Fair Trade Commission said Friday that it has approved a business integration plan involving regional banks in Nagasaki Prefecture.
Those planning the integration are Fukuoka Financial Group Inc., the parent of Sasebo-based Shinwa Bank, and Eighteenth Bank Ltd., based in the city of Nagasaki.
The FTC allowed the plan after noting that the integrated institution will avoid dominating the bank lending market in the prefecture, as the two banks will transfer loan claims totaling almost ¥100 billion to other institutions.
Fukuoka Financial and Eighteenth Bank aim to combine their operations in April next year.
The FTC approval came some 2½ years after the two sides reached an agreement in February 2016.
Since the loan claim transfer will be the first for a bank integration in Japan, the move is expected to affect future realignments of regional banks.
The FTC had shown concern that the new lender might push small companies for rises in lending interest rates, as its loan share in Nagasaki Prefecture will reach some 70 percent after the integration. The FTC had urged the two banks to implement measures including lowering their local shares of lending.
Although the integration was initially planned for April 2017, the plan was put off indefinitely due to the FTC’s prolonged screening.