Did you finally come? Local bank's “commitment” 17 October 19:43

The area around the local bank is noisy. There is a series of capital alliances and cooperation between regional banks. Is the reorganization and integration that have been whispered as “someday” in the regional banking industry finally entering a new stage? Where are the local banks where we are going to deposit money? I chased "commitment and federation". (Ministry of Economic Affairs, Akihiro Shibata, Tomoyuki Hamada, Matsue Broadcasting Station, Mizuki Ito)

Unusual combination

It started in Shimane Prefecture. On September 6, Shimane Bank, the second regional bank, announced a capital alliance. The partner is SBI Holdings, a major internet finance company. The SBI side will invest 2.5 billion yen to hold one third of the voting rights and become the largest shareholder.

Mr. Yoshio Suzuki, President of Shimane Bank, expressed that “It is the start of Shinsei Shimane Bank”.

On the 13th of the following week, Fukui Prefecture continued. The Fukui Bank and Fuboku Bank, which have only two in the prefecture, have announced that they will start discussions for comprehensive cooperation.

Abnormal situation of 40% “red” of regional banks

Local bank management is difficult. According to the Financial Services Agency, “service business profits for customers”, which is the foundation of banking business, such as interest on loans and remittance fees, is in the red in 45 of 105 banks nationwide (FY2018).

The number of customers is decreasing due to the decline in the local population and business closure. Moreover, the BOJ's negative interest rate policy has led to lower lending rates, making it more difficult to earn profits.

Then what should we do. Cost reduction and rationalization through reorganization and integration are “unavoidable”. In fact, Niigata Prefecture's Fourth Bank and Hokuetsu Bank, and in Kyushu, Fukuoka Financial Group and Juju Bank are integrated.

However, there are only a limited number of moves to merge and merge. How close either bank of the store for efficiency, management initiative's for not a few places to go through happens to do ... and the second thought.

“Pressure” from the Financial Services Agency

The supervisory authority, the Financial Services Agency, has a sense of crisis in the current situation of regional banks. Can you secure profits in the future as they are? A policy is urgently demanding management improvements from regional banks.

The FSA executive said, “We will ask the regional banks carefully whether they can reduce costs, increase profits through new businesses, or what else they can do.” It is said that it has started a concrete dialogue with each bank.

Behind the scenes of the Shimane Bank partnership

Shimane Bank moved to a capital alliance with SBI. The Financial Services Agency strongly pressed for a recovery of profitability. That is one of the reasons for the unusual alliance.

Strict management continued due to population decline, low interest rates, and competition from Sanin Godo Bank, which boasts an overwhelming share in Shimane Prefecture.

New year. As a result of calculations for the end of the fiscal year, a deficit of “core business net income”, which indicates the profits of the core business, was confirmed for the third consecutive term.

Suzuki, who looked at the numbers, turned away from the independent route and began exploring ways to partner with other companies. It was SBI that Suzuki Toru relied on. This is because there has been a business alliance with SBI SECURITIES for sale of investment trusts since June last year.

In March, Suzuki Todoroki proposed a capital alliance without going to Tokyo. It was a secret negotiation that only a few people in the bank were informed. The negotiation that “progressed rapidly” (stakeholder) reached an agreement in six months.

However, through the alliance, SBI will become the largest shareholder and send executives to the bank. “I was worried because I had been operating independently for over 100 years since its founding,” Suzuki Totori revealed at a press conference that the alliance was a difficult choice.

Going forward, Shimane Bank will receive support from SBI in the field of fintech, and also want to develop a smartphone app that makes payment and remittance easy.

Utilizing asset management know-how, SBI Group's housing loans are also handled. On the other hand, the company will focus on investing funds and human resources in the strong local sales and draw a vision for improving profits.

The real aim of working with regional banks

Does the partnership with Internet finance really solve the problems of regional banks that are in trouble? I also interviewed SBI President Yoshitaka Kitao alone.

“Now, chicks (local banks) are working hard to smash shells from below. Parent birds (SBI) smash from the top and split to change their chicks. I think it ’s time to become a life. ”(President Kitao)

SBI was founded 20 years ago. Provide financial services using cheap deals and other fees through online transactions. The securities business is now a major player.

President Kitao said, “The regional bank can be regenerated by“ the fusion of the Internet and the real world, ”and the“ fourth megabank concept ”has been proposed.

The idea is to work with multiple regional banks to thoroughly improve efficiency and eliminate waste, and to form a financial network on par with major companies.

For example, it takes enormous costs for regional banks to disseminate regulations such as the development of a bank's core system and money laundering. If SBI takes charge of this all together, the efficiency will increase significantly. SBI will also handle asset management for regional banks.

On the other hand, the regional bank sees a “win-win” relationship with all efforts to deal with local customers. According to President Kitao, more than 10 regional banks have sought support for this initiative.

“In the future, we will go to get a huge number of customers with zero fees for financial services. If you think the regional bank will really change, we will help you as much as possible” (President Kitao)

He has a strong desire to expand partnerships.

Securities majors also approach

There are other collaborations. The Sanin Godo Bank of Shimane Prefecture has partnered with a major Nomura Securities. Accept employees from Nomura and leverage securities services for local customers.

For Nomura Securities, it will lead to the development of local areas and cost reduction. The search for second and third regional bank partners is also accelerated.

Does the mountain move?

An executive of the Financial Services Agency says that “I want to welcome you with a single move,” as Internet finance and securities companies approach local banks.

There is also concern about the economic downturn after next year's Tokyo Olympics and Paralympics. Fintech's emerging powers have also entered into payment services, and competition is intensifying. If local bank management becomes uncertain, the local economy may deteriorate.

What are the local banks where you deposit money and what are you thinking about and where are you going?

Economic Department Reporter Akihiro Shibata Joined Nagano Station in 2004 After working at Nagoya Station, now in charge of the Financial Services Agency

Economic Department Reporter Tomoyuki Hamada Joined in 2009 Toyama Station, Nagoya Station, now in charge of the financial industry

Matsue Broadcasting Station Reporter Mizuki Ito Entered 2016Tsu Broadcasting Office Owase Branch Currently in charge of Matsue municipal administration and economic coverage