So, when Mitsubishi Tokyo Financial Group (MTFG) and UFJ announced last month their intention to merge, in principle at least, it sent out a strong signal that banking reform in Japan is, at last, in its final stages. Along with other changes, such as a shift away from reliance on interest income to more fee-based and commission business, as well as seeking to tap new client sectors (see Cover Story, p20), it is clear that Japan’s banks are gearing up to play a more meaningful role in Japan and maybe even on the international stage.
The merger would reduce the number of mega-banks in Japan from four to three, and would be the biggest realignment in Japanese banking since the government created the country’s four major banking groups – Mizuho Financial Group (MFG), Sumitomo Mitsui Financial Group (SMFG), MTFG and UFJ – in 1999 and 2000.
