When Honda Motor Co. stopped using Sumitomo Mitsui Trust Bank Ltd. as its stock transfer agent last year, the automaker was hit with a roughly ¥426 million termination fee, according to two people familiar with the matter.

The break fee — ¥2,000 ($19) per shareholder — is a little-known practice among Japan's biggest trust banks applied when they lose a client in the shareholder record-keeping business, multiple insiders say.

The bank to which the client transfers typically pays the fee. Insiders say this arrangement keeps a profitable business in the hands of a few big trust banks because newcomers balk at the cost. One departing client was told the charge was an "industry custom."