Japanese regional banks Kagoshima Bank and Higo Bank are in merger talks, though no concrete decision has been taken yet.
This is the second successive move within a week towards the direction.
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The merger, if materialized, would make the new entity one among Japan’s top 10 regional lenders with combined assets of JPY 8.4tn ($72.9bn).
Japanese officials are urging local banks to consider merger optionsin order to shore up profits weighed down by a shrinking population, sluggish growth and declining interest rates.
Higo Bank shares have rose 5.2% to JPY651 at the close of trading in Tokyo, which is the highest price recorded since May last year, while Kagoshima Bank jumped 3.4% to JPY731.
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