Japanese regional financial institutions, Shiga Bank and Senshu Ikeda Holdings, are in the final stages of negotiations to combine their operations, Nikkei Asia reported.
Boards at both institutions are scheduled to vote on the transaction and may formally announce an agreement within the week.
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Under the framework being discussed, Shiga Bank and Senshu Bank would both operate beneath a shared holding company structure.
A combined balance sheet would give the new group Y14.2tn ($90.7bn) in total assets, based on figures from the end of March. That volume overtakes the Y11.8tn held by Kyoto Financial Group, shifting the regional asset ranking.
The transaction builds on an earlier partnership established in April, when the lenders entered a capital and business alliance that involved cross-shareholdings between 0.5% and 1%.
Since that arrangement, the institutions have partnered on syndicated loans and M&A advisory services.
Through complete consolidation, the banks intend to enlarge their balance-sheet capacity to underwrite loans for major corporations and participate in large-scale capital investment projects.
Regional institutions face an approaching regulatory deadline: a temporary statute that exempts regional bank combinations from the Antimonopoly Act is scheduled to lapse in 2030.
Other regional lenders have initiated similar procedures.
Earlier this month, Bank of Iwate, Akita Bank, and Procrea Holdings, which operates Aomori Michinoku Bank entered preliminary talks to assess a business integration scheduled for completion in April 2028.
The three institutions are evaluating the procedural steps required to implement that transaction.
