Three Tohoku Regional Banks Prepare for Merger Talks

Aomori Michinoku Bank, Bank of Iwate, and Akita Bank are preparing to enter merger talks to combat steep population declines and intensifying competition for deposits in northern Japan's Tohoku region. The three lenders are expected to announce the start of these discussions as early as Friday.

If the merger is completed, the resulting banking group would hold over ¥13 trillion ($82 billion) in assets. This would make it the largest lender in the region, surpassing 77 Bank. The move comes amid pressure from the Financial Services Agency, which has urged regional banks to consolidate operations to survive grim demographic trends in rural areas.

Procrea Holdings, the parent company of Aomori Michinoku Bank, along with Akita Bank and Bank of Iwate, stated that their respective boards will discuss the prospect of merger talks on Friday. The banks have noted that no final decision has been reached regarding the consolidation.