Japan Fair Trade Commission (JFTC) has approved the merger of Fukuoka Financial Group (FFG) and the Eighteenth Bank following a lengthy review.

After carrying out a thorough review, JFTC came to a conclusion that given the remedies proposed by the parties, competition in any particular fields of trade is unlikely to be substantially restrained.

The remedies suggested by the two financial institutions include the sale of JPY100bn ($897m) worth loans to their competitor banks, in order to minimise their market share.

In 2016, FFG expressed its intent to acquire the Eighteenth Bank and planned to merge it with its existing business unit Shinwa Bank.

FTC Mergers and Acquisitions division director Masanori Fukamachi was quoted by Reuters as saying: “Competition in the region will not be undermined if the merged banks offload loans. That would help other banks to boost their competitive pressure.”

Fukamachi further added that about 20 banks have already expressed their willingness to purchase loans offered by FFG and the Eighteenth Bank.

In order to ensure that the business entity does not increase the interest rates abruptly, the two banks noted that the new business entity will be constantly monitored by the internal sources as well as through third-party organisations.

FTC will monitor the loan transfers transactions.

The merger is expected to be completed by April 2020.