- Sep. 13, 2019
- Sep. 12, 2019
- Sep. 12, 2019
Bank of Japan
1. We have been informed today that a basic agreement has been reached between Hanshin Bank and Midori Bank that Midori should merge into Hanshin Bank and that the new bank would operate by further clarifying its role as a community bank in Hyogo Prefecture by establishing a solid operational base within the prefecture.
The above agreement on the merger is based on the premise that request will be made to the Deposit Insurance Corporation for financial assistance related to losses and non-performing assets which Midori Bank assumed from former "Hyogo Bank".
2. Midori Bank was established in October 1995 upon the collapse of former Hyogo Bank, under extraordinary circumstances in which reconstruction was under way after the Great Hanshin-Awaji Earthquake, with capital contribution of financial institutions nation-wide and local business enterprises, in an effort to satisfy fund demands for reconstruction and to maintain financial stability in the region. Midori Bank has been fulfilling its role as a financial institution in providing funds to support reconstruction after the Earthquake. However, the bank has been facing financial and managerial difficulties including deterioration in asset quality due to the downturn of post-Earthquake local economy.
Midori Bank's merger with Hanshin Bank, a bank which maintains an operational base within the same local community, and the fresh start as a new community bank in Hyogo Prefecture will support the stability of the financial system as a whole. It is also significant as it would contribute to sound development of the local economy by satisfying demands for reconstruction.
3. The details of the merger will be decided through discussions among relevant parties. The Bank of Japan will support the agreement between the two banks and will keep in close contact and cooperate with Ministry of Finance, Deposit Insurance Corporation, local municipal authorities and other relevant parties, toward smooth implementation of the merger and proper operations of the new bank.
4. Until the merger, Midori Bank will continue its business as usual. Deposits at Midori Bank will be assumed by the new bank and will be fully protected. Thus, there is no need for depositors to be concerned and we strongly hope that they will act sensibly.
5. Until the implementation of the merger, the Bank of Japan, if necessary, will take steps to secure funds to continue operation of Midori Bank, including extension of loans pursuant to Article 38 of the Bank of Japan Law.