Shiga Bank and Senshu Ikeda agree to aim for April 2028 integration

Osaka – Shiga Bank and Senshu Ikeda Holdings announced Thursday a basic agreement to launch talks on integrating their operations in April 2028 to create the largest local banking group in the Kansai region in terms of consolidated gross assets.

Shiga Bank — which mainly operates in Shiga Prefecture — and Senshu Ikeda Holdings — the parent of Senshu Ikeda Bank, whose primary service area is Osaka Prefecture — hope to reach a definitive agreement in April 2027.

Combined gross assets at Shiga Bank and Senshu Ikeda Holdings, both listed on the Tokyo Stock Exchange’s top-tier Prime section, amounted to about ¥14.2 trillion on a consolidated basis at the end of March this year.

Shiga Bank and Senshu Ikeda Bank will operate under Senshu Ikeda Holdings, instead of merging into a single entity, after the former becomes a subsidiary of the holding company through a share swap. Shiga Bank will be delisted from the TSE.

“We aim to become a financial group that can realize growth of Kansai,” Shiga Bank President Shinya Kubota said at a joint news conference in the city of Osaka on Thursday.

“We hope to create the most trusted and needed financial group in the region,” Senshu Ikeda Holdings President Hirohito Sakaguchi said.

Shiga Bank and Senshu Ikeda Holdings announced in April this year a capital and business alliance calling on the two firms to own an equity stake of about 0.5% to 1.0% in each other, and have deepened their relations partly by providing client companies with support related to mergers and acquisitions.

Through the integration, they aim to expand their client bases and beef up their competitiveness.

They will not carry out large-scale branch consolidation for the time being.

Also on Thursday, Ariake Capital, a Tokyo-based investment fund focusing on regional banks, said that it plans to sell its entire equity stake in Senshu Ikeda Holdings to Shiga Bank after prior negotiations.

As a result, Shiga Bank will become Senshu Ikeda Holdings’ top shareholder with a stake of about 11.8%.

As interest rates are on the rise in Japan, business scale is increasingly becoming a key factor for regional banks’ earnings growth.

Banks now need to increase loans by efficiently collecting deposits, the main resource for lending, in order to boost profits. With competition for loans heating up, many regional banks have opted for business integration.