Shinsei, Aozora Bank Merger To Extend Beyond Deadline
Published: 09-Feb-2010
The merger plan between Shinsei Bank and Aozora Bank has hit a gridlock over key issues such as strategy and capitalization of the combined entity, difficulty in integrating systems and on the outcome of an inspection by Japan's Financial Services Agency.
The two Japanese banks entered into merger talks during the height of financial crisis when both fell into the red. That time they agreed to walk away from the deal if either one was not satisfied with other's capital structure. However, since then, they returned to profitability and have a wide difference in capitalization.
Another hurdle is the future of the combined entity. Both mid-sized banks have been working hard to compete in Japan's overcrowded banking market. Shinsei specializes in retail banking and forced into the consumer finance space while Aozora's focuses on deeper relationships with domestic lenders.
Even though both banks intend to work towards the $4.9bn merger, there is every possibility that the talks could extend beyond the October 2010 deadline if the problems are not solved out in time.
Reportedly, Japan's financial regulator is inspecting the banks' financial affairs, and based on the results of the inspection, the two banks plan to make a final decision by the end of March 2010.
Rahul Gupta, CFO of Shinsei, said: "We are hoping that the right outcome is reached soon. Clearly there are a number of issues that need to be resolved. It is progressing slowly. It is more important for us to spend time to get it right than just be dictated by a certain date."
Network Sites

Suppliers To This Sector
Browse A-Z
White Papers
Browse A-Z
Use of Voice Biometrics in Smart Card Applications
Many organisations have implemented or are looking into smart card solutions. The objectiv ...
Tower Group Report: Global Exchange Consolidation
This 12-page TowerGroup report analyses the rapidly consolidating exchange market, examine ...
To Protect and Detect: An Evaluation of Compliance System Requirements for the Securities Market
Many financial services firms have been failing to comply with post MiFID Regulations and ...
The Value of Process Management in GRC
In this white paper, the value of Process Management in GRC is discussed. Four main aspect ...
The Value of a Comprehensive Integration Solution
Many enterprises are currently spending more on integration-related projects than they nee ...
The Role of Continuous Controls Monitoring and Auditing in GRC
A business in control is the starting point for most people in business. Without being in ...


Delicious
Digg
LinkedIn
Reddit
Stumble
Viadeo
Mail sent successfully