After more than a decade wallowing in debt and seemingly unable to turn themselves around, Japan’s banks appear to be looking to new products and client segments to rejuvenate their business models and spread risk throughout the system. Geraldine Lambe reports. For more than a decade, the Japanese banking system has suffered from painful indigestion – burdened by crippling levels of debt that the banks and the government were unable or unwilling to work out of the system. Whether we blame government policy, overly-cosy relationships between banks and borrowers or a lost decade of recession and deflation, Japan’s banks have for years failed to find a way to make themselves more profitable.
Last month’s proposal of marriage between MTFG and UFJ would create the largest bank in Japan, but it will only be positive news if the two businesses can be integrated, writes Geraldine Lambe For the Japanese banking system, recuperation has been a long and painful process. It is only now, after more than a decade of despair, that Japan’s so-called mega-banks are ready to start performing as mega-banks should.