Tokyo gears up as epicenter of regional bank consolidation in Japan

Finally, some order in the fragmented sector has come.

According to SNL Financial, consolidation in Japan's fragmented banking space may regain some momentum as Joyo Bank Ltd. and Ashikaga Holdings Co. Ltd. join forces to create the third-largest regional lender in Japan with a stronghold around Tokyo, an area that banks without nationwide networks are gravitating to.

The two companies said Nov. 2 that they signed a basic agreement to merge. Under the plan, Joyo Bank, the 16th-largest lender in Japan by assets and the top bank in Ibaraki prefecture, will form a new financial group under once-bankrupt Ashikaga, the industry's No. 29 and the biggest in Tochigi prefecture.

Here's more from SNL Financial:

The holding company will be renamed, possibly with headquarters in Tokyo, after the two sides sign a definitive agreement for execution from April 2016 through Oct. 1, 2016.

Consolidation in Japan's fragmented banking space may regain some momentum as Joyo Bank Ltd. and Ashikaga Holdings Co. Ltd. join forces to create the third-largest regional lender in Japan with a stronghold around Tokyo, an area that banks without nationwide networks are gravitating to.

The two companies said Nov. 2 that they signed a basic agreement to merge. Under the plan, Joyo Bank, the 16th-largest lender in Japan by assets and the top bank in Ibaraki prefecture, will form a new financial group under once-bankrupt Ashikaga, the industry's No. 29 and the biggest in Tochigi prefecture. The holding company will be renamed, possibly with headquarters in Tokyo, after the two sides sign a definitive agreement for execution from April 2016 through Oct. 1, 2016.

Based on data current as of June 30, the combined operations of the two companies will have the third-largest total assets among regional banking groups in Japan, including one that will be established by Bank of Yokohama Ltd. and Higashi-Nippon Bank Ltd.