Aside from its three mega-banks, Japan has a financial network that includes shinkin banks, co-operative banks and city and regional institutions. Stefania Palma explores how each is responding to Japan’s economic slowdown given their different mandates, structures and resources.

Narrower scopes, smaller balance sheets and limited global footprints are not stopping smaller Japanese banks from reinventing themselves at a time when diversifying revenue sources is key. Stefania Palma assesses their progress.

Japan's mega-banks – Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group – have faced a number of challenges over the past few years, from the country's low-interest-rate environment to its ageing population. However, by diversifying their revenue sources and geographical portfolios, these lenders are managing to defy stagnant domestic conditions.

Bank of Tokyo-Mitsubishi UFJ's purchase of Thailand-based Bank of Ayudhya last year was indicative of the wealth of opportunities opening up in the south-east Asian economy.

Japan's unemployment rate may be shrinking but behind this headline figure lurks problems such as low labour mobility and excessive reliance on part-time employment. These are deep-rooted issues that new government initiatives are trying to flush out.