Statement by the Governor concerning the Merger Plan of between the Sumitomo Trust and Banking Company and the Long-Term Credit Bank of Japan
Bank of Japan
1. We have been informed today from both the Sumitomo Trust and Banking Company and the Long-Term Credit Bank of Japan that they will start definitive deliberation towards a merger by the end of next year. At the same time, the Long-Term Credit Bank of Japan reported us that it is planning to carry out the comprehensive disposal of non-performing loans and thorough reorganization to improve efficiency.
2. We have been informed that the two banks voluntarily initiated the discussion towards a merger since they expect that the variety of financial services will widen as Japan's "Big Bang" initiative is implemented in a progressive way. The Bank of Japan highly evaluates the decision of the two banks.
3. The post-merger bank will strive for establishing a firm business base and offering various financial products by combining the know-how and customer bases of the two banks in the fields of banking business, trust business, and investment banking. Thus, it is expected that the merger will further improve financial services for customers at home and abroad.
4. The rejuvenation and stabilization of the financial system is an urgent task for the recovery of the Japanese economy.
The Bank of Japan expects that the decision of the two banks will greatly contribute to the stability and restoration of confidence in the Japanese financial system, and will lead to future positive action by the management of other financial institutions. At the same time, we are prepared to provide necessary support for the smooth implementation of the merger plan, in close cooperation with the Financial Supervisory Agency and the Ministry of Finance.