Oct. 1 marked the first anniversary of the privatization of the nation's postal service. In April 2003, the Postal Service Agency became Japan Post, a public corporation. Then, in January 2006, Japan Post created Japan Post Corp., a stock company.

On Oct. 1, 2007, Japan Post Corp. became Japan Post Holdings Co., consisting of four units: Japan Post Bank Co., Japan Post Insurance Co., Japan Post Service Co. (mail delivery firm) and Japan Post Network Co. (over-the-counter services). These four firms are not yet very stable, as they struggle to find ways to survive and grow. Given this situation, opposition lawmakers are calling for a review of privatization.

For the six-month period ended March 31, 2008, the Japan Post group earned a net profit of ¥277.2 billion, 29 percent above projections. But more than half the profits came from the banking arm, which profited to the tune of ¥152.1 billion, 17 percent above projections, through solid asset management.

The insurance company earned ¥7.6 billion, down from a projected ¥8 billion. The over-the-counter firm, with some 24,000 post offices nationwide, posted ¥4.6 billion in profits, 86 percent below the business plan estimate, as there was little growth in revenue from handling fees paid by the bank and insurance firms. And the mail delivery firm garnered ¥69.4 billion, ¥10 billion below the business plan estimate.

In August, the over-the-counter firm opened convenience stores in some post offices. And some post offices are acting as agents for companies that provide house-moving services. It will take time for the new businesses to operate in the black.

The banking firm is not doing so well with its new businesses, including housing loan sales. Both the bank and insurance firms are suffering from customer attrition. It is imperative that the postal group maintain its post offices, especially in rural areas — not only to ensure a basic level of services in those areas but also to strengthen the group's base for sales activities.