The details of the negotiations for the merger between two credit unions in Adachi Ward and Katsushika Ward, Tokyo have been revealed, with the merger aiming for October 2025, and plans to review store functions in line with the times and reassign staff. We are working to strengthen support for businesses through this.
It was revealed on the 13th that Adachi Seiwa Shinkin Bank, headquartered in Adachi Ward, and Toei Shinkin Bank, headquartered in neighboring Katsushika Ward, are proceeding with final negotiations toward a merger. became.
On the 14th, each released a comment stating, ``It is true that we are considering a merger,'' and ``No decision has been made at this time, and if a decision is made, we will promptly disclose it.'' is.
According to sources, the merger is targeted for October 2025.
Based on this, we have decided not to simply consolidate or close our stores, but rather to begin reviewing their functions in line with the times, including the advancement of digitalization.
Additionally, through staff reassignment and other means, we plan to strengthen support for small and medium-sized enterprises with their issues of training successors and launching new businesses.
The two Shinkin Banks will proceed with the necessary procedures, including a formal agreement for the merger, and attention will be focused on whether they will be able to increase their significance as locally-based financial institutions.
What is Adachi Seiwa Shinkin Bank?
``Adachi Seiwa Shinkin Bank'' is a credit union with its head office located in Adachi Ward, Tokyo, which was established in 1920.
As of the end of March last year, it had 433 employees, operated 23 branches mainly in the ward, and had a deposit balance of 577.8 billion yen, making it the 16th among the 23 Shinkin Banks in Tokyo.
Adachi Ward is home to a concentration of businesses in the wholesale, retail, and manufacturing industries, and has supported local finance for nearly 100 years.
What is Toei Shinkin Bank?
Toei Shinkin Bank is a credit union with its head office located in Katsushika Ward, Tokyo, which was established in 1939.
As of the end of March last year, it had 144 employees, operated 10 branches mainly in Katsushika Ward, and had a deposit balance of 143.7 billion yen, the lowest among Shinkin banks in Tokyo.
Katsushika City has many businesses in the wholesale, manufacturing, and accommodation industries, and has continued to provide locally-based financial services.
Four Shinkin Banks in Tokyo, including both Shinkin Banks, entered into a business alliance in 2001, and have deepened their relationships by sharing various know-how and working together to expand and match customers' sales channels. .
Environment surrounding Shinkin Banks
As the population declines and the aging population accelerates, the environment surrounding Shinkin banks is becoming increasingly difficult.
According to the Shinkin Central Bank, the balance of deposits at Shinkin banks nationwide has continued to increase, but in recent years, due to inheritance and other reasons, customers have begun to move their deposits to other financial institutions, and the amount of deposits has decreased. Some credit unions are starting to decline.
It has also been pointed out that credit unions, which are smaller than major banks, are lagging behind in digitalization and are losing customers from younger generations.
Furthermore, like other financial institutions, the earnings environment was deteriorating due to continued low interest rates.
If the ``world of interest rates'' returns due to the Bank of Japan's policy change, the profit environment is expected to improve, but there is also the possibility that interest rate competition with strong financial institutions will intensify.
Furthermore, with the expansion of NISA, a preferential tax system for individual investors, there are concerns that if the movement of funds into stocks accelerates, the outflow of deposits will further accelerate. .
The Financial Services Agency says that the business environment for Shinkin banks is more severe than that for regional banks, and points out that they need to strengthen their business foundations in order to support the local economy.
A credit union that is different from a bank
Shinkin banks are an important entity that supports local finance, with their main clients being individual stores and small and medium-sized enterprises.
Its roots lie in the Meiji era, when credit unions were created to provide mutual aid to economically disadvantaged farmers and merchants, and are non-profit organizations that differ from banks, which seek profit.
Shinkin banks must specify in their articles of incorporation the local governments in which they can operate and obtain national approval, and as a general rule, they cannot cross borders and open branches in large cities and generate profits, unlike regional banks.
Additionally, loans and deposits are generally limited to individuals and small and medium-sized enterprises within the business area.
According to the Deposit Insurance Corporation, there were 484 Shinkin banks nationwide in 1973, but as a result of mergers against the backdrop of economic stagnation and population decline after the bursting of the bubble economy, there were 254 as of the end of March 2023. I am.
Even so, while the number of banks far exceeds the 99 of local banks and they are able to provide detailed services, many of them still have issues with their management infrastructure.
In the local areas of the two Shinkin Banks
I heard from locals about the announcement of negotiations for a merger between two credit unions in Tokyo's Adachi and Katsushika wards.
A man in his 50s who runs a footwear store in a shopping district near the Toei Shinkin Bank's head office said, ``I'm surprised because I've been connected to this Shinkin Bank since my grandparents' time.It's still a kind and community-based Shinkin Bank,'' said a man in his 50s. I want it,” he said.
In addition, a woman in her 80s who lives nearby said, ``I didn't know that they were considering a merger, but even if they merge, I would like the nearby store to remain.''
A man in his 60s who runs a fruit and vegetable store in a shopping district near Adachi Seiwa Shinkin Bank's head office says, ``Unlike major financial institutions, they treat people with compassion and are willing to help with consultations.'' Even if they do, I would like them to be treated with respect for the local community."
In addition, a male user in his 60s said, ``I think it's a good thing that the scale is large.''