Three Japanese Banks Form Alliance to Fight Population Slump

Three banks based in central Japan are teaming up to combat the enduring challenge of a dwindling population that’s threatening their long-term viability.

The lenders will cooperate in areas such as venture financing in order to draw outside talent and funding into the region, Shizuoka Bank Ltd., Hachijuni Bank Ltd., and Yamanashi Chuo Bank Ltd. said in a joint statement on Thursday. The alliance will try to boost the population in the region, so as to address issues like labor shortages, according to Shizuoka Bank’s president Minoru Yagi at a briefing.

The banks are based in three neighboring prefectures in central Japan. Hachijuni is located in Nagano, whose snowy mountains make it a winter sport center—it hosted the Olympics in 1998. Shizuoka is a core unit of Shizuoka Financial Group Inc., and the prefecture it’s named after is famous for its tea, seafood and the hot springs-filled Izu Peninsula. Yamanashi, home of the third lender, is a mountainous area that’s a major producer of grapes and wine.

The lenders plans to draw on the shared potential of the common region, which includes a “rich natural endowment,” according to their statement. They will keep their independence under the alliance, though “we don’t know what will happen in the future,” Yagi said at the briefing. 

Shares of the three lenders surged early Thursday amid speculation of what they will announce, though the stock pared those gains after reports of the business tie-up. Still, the spotlight is now on the country’s regional banks and potential industry consolidation. Just this week, Chiba Bank Ltd. said it was considering various strategic options including the purchase of shares of Chiba Kogyo Bank. Gunma Bank also said it’s considering such options including a merger with a rival.

Those alliance plans reflect shrinking populations and sluggish economic growth in many parts of regional Japan. The Bank of Japan ended its decades-long super-easy monetary policy last year and has raised interest rates three times as global inflationary pressure pushed up the cost of living in the Asian nation. Rising rates benefit banks by increasing lending margins, but regional lenders need to monitor whether tighter credit weighs on local businesses.

“The pace of changes in the business environment is accelerating,” said Hideyasu Ban, a Bloomberg Intelligence analyst. “Regional bank managers probably have a sense of urgency now, feeling pressured to build broader cooperative relationships with other lenders.” 

With assistance from Takashi Nakamichi.

©2025 Bloomberg L.P.

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