Banks in Japan

Publication Date :

26 Nov, 2017

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Table Of Contents

Overview of Banks in Japan

The banks in Japan operate similarly to institutions worldwide, offering regular financial services. However, with the advent of technology, Japan has progressed rapidly at the forefront of online banking services. The Bank of Japan (Central Bank) was established in 1882 to control the domestic money supply and act as a “Lender of Last Resort” for the Japanese banks.

Currently, the financial system in Japan is going through a negative interest rate regime whereby depositors have to save their money, and lenders are paid for borrowing money.

Overview of Banks in Japan

Structure of Banks in Japan

The banking system of Japan is classified into: -

Foreign banks
Domestically licensed banks include regional, city, and trust banks.

The traditional banks in Japan were divided into clearly defined segments: -

Commercial banks
Long-term credit banks
Trust banks (retail banking activities)
Loans and savings bank

During the 1980s, non-banking operations (consumer loans, credit cards) had also cropped up. Then such organizations also started offering traditional functions of banks (e.g., issuing of loans). Subsequently, in 1990, the five largest banks were Japanese banks in total assets. Moreover, such banks opened branches across the globe, traded in FOREX activities, and flourished the position of the Japanese banking system on the world map.

Digital Banking In Japan

Japan's digital banking landscape combines traditional banking practices with technological advancements, providing secure and efficient digital banking services to customers. It is gradually evolving to embrace technological advancements. Established banks are expanding their digital services, offering online and mobile banking platforms to cater to customer demands. While the fintech sector is growing, Japan's conservative banking culture poses challenges for new entrants. However, the country's government initiatives to promote fintech innovation and open banking are expected to drive further progress in the digital banking sector.

List of Top 11 Banks in Japan

Revolut
Mitsubishi UFJ Financial Group
Japan Post Bank Co., Ltd.
Mizuho Financial Group
Sumitomo Mitsui Financial Group
Norinchukin Bank
Resona Holdings
Fukuoka Financial Group
Chiba Bank
Bank of Yokohama/Concordia Financial Group
Hokuhoku Financial Group, Inc.

Let us explain each one of them in detail: -

#1. Revolut:

Experience banking like never before with "Revolut," the app-based solution in Japan operating under a banking license Revolut Bank UAB. It is designed for the modern world that puts control at your fingertips. Seamlessly manage your finances, make swift global money transfers, and save with ease. Enjoy fee-free currency exchange and cryptocurrency transactions. With top-notch security features and a user-friendly interface, Revolut ensures your money is safe and accessible anytime, anywhere. Join millions who trust Revolut for secure, convenient, and rewarding banking. Sign up now and unlock a world of infinite financial possibilities!

#2. Mitsubishi UFJ Financial Group

One of the leading companies of the Mitsubishi Group, this bank is Japan’s largest financial group and the world’s second-largest Bank Holding company. It is the second-largest firm in Japan regarding market capitalization, with its headquarters in Chiyoda, Tokyo. In addition, it functions in various businesses, such as retail banking, corporate banking, and trust assets in around 50 countries. The net operating profits for 1Q17 were ¥349.0.

#3. Japan Post Bank Co., Ltd.:

Established in 2006 and headquartered in Tokyo. It is primarily a savings institution and was a part of the reorganization of Japan Post into Japan Post Holdings, which permits the wiring of funds between the post office and the banking unit. The loan facilities include the overdraft services secured by Japanese government bonds and time-bound deposits. It is one of Japan's largest deposit banks and offers nationwide services of funds withdrawal with international debit and credit cards.

The banks' total assets were ¥205 trillion, with a total income of ¥266 billion as of 2019.

#4. Mizuho Financial Group:

Mizuho Financial Group is a public sector bank holding company with its headquarters in the Otemachi district of Chiyoda in Tokyo. Established in 2003, this group offers various banking services around the globe, such as:

Business and Retail Banking
Corporate and Institutional Company
Global Corporate Banking
Asset management services
Markets and Securities
Norinchukin Bank
Resona Holdings

The bank employed around 59,132 employees as of 2020 and had a net income of ¥603.54 billion as of 2017.

#5. Sumitomo Mitsui Financial Group:

It is a Japanese bank holding/ financial services company established in 2002 in Chiyoda, Tokyo. It holds assets worth $2.036 trillion around the world, offering services such as: -

Personal Banking
Corporate Banking
Investment Banking/Management
Wealth Management
Credit Cards

For 2019, it reported total assets of $2.036 trillion and a total income of $6.47 billion. In addition, it has several subsidiaries offering professional services for respective financial products.

#6. Norinchukin Bank:

It was founded in 1923 by the Japanese government to support its agricultural prospects. It played a crucial role in rebuilding post World War II, especially with investments in the textile industry. In addition, it is one of the largest institutional investors with an investment portfolio of over $400 billion and over $850 billion in assets. Norinchukin Bank is well known as Japan’s largest hedge fund, with branches in New York, London, and Singapore.

The bank invests in bonds, securitization facilities, private stock equity, real estate, forest, and fisheries. As of 2016, the bank's total assets were $1,000 billion and a total income of $19 million.

#7. Resona Holdings:

It is the holding company of the Resona Group (5th largest banking group) with its headquarters in Koto, Tokyo. The primary operating entities of the group are: -

Resona Bank (corporate and retail bank)
Saitama Resona Bank

The focus of the groups is to offer professional services in the following segments: -

Individual Segment – Consultation relating to personal loans and asset management/restructuring.

Corporate Segment – Loans for corporate, asset management, real estate, corporate pension, business succession, and other supporting activities to grow a business.
Market Segment – Responsible for procurement and operation of funds, FOREX, bonds, and derivative facilities.

For Q1 '17, the net income attributable to shareholders is ¥37.2 billion and employs around 70,000 employees.

#8. Fukuoka Financial Group:

Fukuoka Financial Group is a Japanese company listed on the Nikkei, established as a financial holding with the holding of the Shinwa Bank as a wholly-owned subsidiary. Its headquarters is in Fukuoka (the largest city of Kyushu, located in the south of Japan). The group’s primary services are banking, which constitutes deposits, loans, and domestic and foreign exchange services.

Other services include guarantees, revitalization support, loans management, and collection business. In 2016, the total income of the bank was $2 billion.

#9. Chiba Bank:

This bank is the third largest of Japan’s 64 regional banks in total assets. It has headquarters in Chiba (adjacent to Tokyo) and has one of Japan's most important industrial concentrations.

The bank's strategy is to expand its branch network into adjacent areas along Tokyo-bound railway lines. Emphasis is also on the development of southern Chiba Prefecture as a tourist and resort area. One of the few institutions disclosing NIM (Net Interest Margins) on their lending facilities.

#10. Bank of Yokohama/Concordia Financial Group:

It is the largest regional bank of Japan operating in southwestern Tokyo. It was formed amidst the collapse of several existing banks in the region to smoothen the financial services in the area. In 2015, the Bank of Yokohama announced a merger with Higashi-Nippon Bank to create Concordia Financial Group, Ltd. As a result, it was listed on the Nikkei 225 stock market index.

#11. Hokuhoku Financial Group

It was established in 2003 with its headquarters in Toyama. The following segments are operated in this group: -

Hokuriku Bank
Hokkaido Bank
Other segments

The banking segments offer financial services through banking operations. The other component handles the leasing and credit card business and non-banking subsidiaries.

The Hokuriku Bank and the Hokkaido Bank underwent management integration in 2004 to form the Hokuhoku Financial Group, Inc., which today operates as a super-regional financial network enclosing the entire Hokuriko region (Tokyo, Osaka, and Nagoya areas).